Apr

20

Rollover IRA

Posted by cameron

April 20, 2007 |

I have rolled-over from 401K savings plan to a rollover IRA several times now. Most companies have “how to” instructions on their websites. The first time I was definitely nervous about the process. Subsequent rollovers have been as easy as can be. It was a short three step process the first time and even easier after that:

Step1: I contacted the organization I wanted the money to go to and had them setup a rollover IRA. I recorded the account number, the official name of the company and the exact name the account is in.

Step2: I contacted the company that had my 401K. They sent me paperwork to submit. The form required the information I recorded in step 1. I filled out the paperwork and mailed it off.

Step 3: I had expected the transfer to happen between those two companies but instead I received a check made out to the receiving company but in my name. I called the receiving company who gave me the address for that department, wrote my new rollover account number on the check and sent it by registered mail. Within a week I could see the money appear in my new rollover IRA account.

That’s it. The second and subsequent times did not require step 1 and I was definitely less nervous about it. Although I setup the rollover account by phone it can also be done online. The first time through though I preferred to talk to an “expert” at both companies. It’s a “peace of mind” thing. Each time I did call the receiving company to make certain I was sending it to the correct address. Companies do move things around.

Rolling over pre-tax contributions is a “tax event”. Both companies will report it and I had to declare it on those years’ taxes. There is no penalty for doing this but the IRS wanted to make sure I didn’t just keep the check tax-free. Don’t forget this when you do your taxes.


Comments

Name (required)

Email (required)

Website

Speak your mind

<< Post Navigation >>

« « Catch Up Retirement Savings | Retirement House Plan Sites » »