How to Roll Over a 401k Retirement Account
When you leave a job, you may have a 401k account that you don't have to leave behind. You can also avoid early withdrawal penalties by rolling your 401k account into an individual retirement arrangement or your new employer's 401k plan, if it allows incoming rollovers.
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Instructions
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Call or email your customer service representative for your current 401k provider. To roll over your 401k, your current provider must receive notice that you are separating from service. You should also talk to the provider to find out what rules may apply to your rollover.
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Research whether your new employer has a 401k or other qualified plan and what the plan's rules are should you wish to roll over your current 401k account. Your research should determine whether your new employer's plan accepts rollovers. Once you determine that the new employer's plan allows rollovers from another plan, review its investment options.
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Research IRA accounts offered through brokerage or investment firms or banks. You should review the types of investments offered as well as the fees associated with their IRAs. If you choose to roll over your 401k account into an IRA, then you should open an IRA account with the firm or bank you selected.
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Request rollover forms from your current 401k provider once you have made a decision on where you want to roll over your 401k account. To avoid any possible mistakes, make sure you fill out forms for a direct rollover.
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Submit your completed forms to your current 401k provider.
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Check your new employer's retirement plan or the IRA you opened to see whether your 401k funds have been rolled over. If there are any problems, call your old 401k provider to ensure the check was mailed. If the distribution was made, call your new provider to make sure the funds were received.
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Tips & Warnings
If you do not choose a direct rollover and you receive your 401k account, to avoid tax penalties, deposit it in your new employer's 401k or an IRA within 60 days. If you deposit the check after 60 days, it will be considered a distribution and you will need to include the amount of the check in your income. Depending on your age, you may be assessed a 10 percent penalty.
