How to Avoid Penalties With a 401(k) Rollover

Video Transcript

"My name's Phillip Beningoso. I'm an investment professional, and I'm going to be discussing how to avoid penalties with a 401k rollover. The IRS now allows you to move retirement money without taxes or penalties as long as you play by their rules. Let me give you a few simple steps to follow that can save you a tremendous amount of time and money. First, you want to review your financial and retirement planning goals by making sure that moving your 401k plan account is in your overall best interest. Two, consult with a qualified tax advisor about your intended move to get a clear picture of of how to move it and that your options and potential tax consequences. Three, thoroughly research the new location for your 401k money, and choose investment options that are compatible with your risk tolerance and investment horizon. Many different places that you bring it to allow you to have different types of investments, whether they're mutual funds, or stocks and mutual funds, or a very slew. It depends on what you're interested in. Four, contact the service representative or asset manager where your new account will be, and ask him to provide you with the IRS required paperwork for accomplishing a qualified transaction. Five, choose your investment option, sign, date the paperwork, and return that for processing. It's a very simple process. Six, is after the transfer or rollover is complete check the performance of your investments at least quarterly to make sure that they're doing well. The information provided here is for informational purposes only, and should not be considered an individualized recommendation or personalized investment advice. Any investments or strategies mentioned here may not be suitable for everyone. My name's Phillip Beningoso, and I'm an investment professional."