Comments on: How to Rollover a 401k into an IRA

By: Mike

Mike — Fri, 20 Nov 2009 16:46:29 +0000

Hi Norm. As to how to do it, you literally just follow the steps above: Open an IRA somewhere, fill out the rollover paperwork, then once the cash shows up in the IRA, invest it how you think is appropriate. As to whether or not you should do it, this article contains my thoughts. In short: Yes, most people should rollover an old 401k into an IRA. (Here are a few exceptions.) I generally view it as the best approach to either go to a fund company (Vanguard, for instance) and create a diversified portfolio of low-cost index funds, or go to a discount brokerage firm and create a diversified portfolio of low-cost ETFs. (A few example ETF portfolios can be found here.)

By: Norm Haugen

Norm Haugen — Fri, 20 Nov 2009 16:39:39 +0000

I’m 69 and retired. I have a 401K with my former employer and it is in a stable value fund. This is the bulk of my retirement savings. I have not withdrawn from it to date. It is not a large amount, but I would like to know what is the best way to transfer it to a IRA, if that is advisable.

By: different JC

different JC — Wed, 16 Sep 2009 20:52:25 +0000

In step 1 I would recommend Fidelity over any other firm. They have the lowest cost index funds; even lower than Vanguard. The only downside is those IRA have a 10k min investment.

By: Natalie

Natalie — Wed, 16 Sep 2009 20:15:54 +0000

Good point regarding “One Last Note” I had two 401k accounts. I got the 1st 401k rolled over with a Fidelity IRA, but when I contacted my previous employer’s ING to roll over the second- I realized that I had to request a name change and change of address form. It didn’t take long before everything was rolled over. I put it in a simple “aggressive growth” (appropriate for my age so I’m told), but I want to do something more with it. I don’t know if the Fidelity agents are what I’m looking for as far as advise. Anyway, these are great tips! By the way, my company, fabeetle, would like to know why you save and invest? tell us your story in 100 words or more and you may win an iPhone. http://www.fabeetle.com/giveaway
Congrats on your book! Can’t wait to read.

By: JC

JC — Wed, 16 Sep 2009 13:17:59 +0000

RE: Step 2 Potential Pitfall. This not only can happen, this may have to happen for some 401k rollovers. I had a 401k with Fidelity and the 401k admin told me i HAD to get the check directly to me (ie. they would not do a direct rollover to the new trustee of the IRA). Thus, it is imperative to follow up, make sure you get the check, and mail it within the 60 days, and confirm it was deposited into the IRA. Then make sure it all got reported properly on your tax return.