401k
401k Information

Roll Over Ira

Can I Roll My 401(k) to a Roth IRA: The commonly asked question

In many ca 00004000 ses, an employer will offer a retirement savings plan such as a 401(k). If you ever leave that job, you will have to make a decision regarding your 401(k). You can cash it out and take what is in the account, minus taxes, but this is not advised. So this leaves the question, can I roll my 401(k) to a Roth IRA? The answer is yes, and for most individuals, it is probably the best thing to do. If you decide to do the rollover, you must have a Roth IRA account. If you do not currently have one, you will need to open a new account before performing the rollover.

Types of Rollovers: Direct Rollover / Indirect Rollover

When dealing with a 401(k) plan, there are two types of rollovers to choose from. The first is a direct rollover. This is usually the best option. With a direct rollover, the funds from your 401(k) will simply be sent over to the Roth IRA account. The only requirement is that you already have an open Roth IRA account. With this type of rollover, you should not incur any IRA penalties or withholding taxes when performing the rollover. It is a simple matter of transferring the funds from one account to the other.

The other type of rollover is indirect. This can be more complicated. You may have been trying to find the answer to whether you can roll your 401(k) over to a Roth IRA. Now that you have determined that is possible, you may have wasted some valuable time. An indirect rollover occurs when there were distributions made from the 401(k). Simply put, you would have received a check for the amount from your 401(k) account. If you do receive a check, you will notice that the amount will be less 20% for taxes. This is where things can get complicated. In order to abide by IRA rules, the rollover must consist of the entire amount that was in your 401(k). For example, if you had 0,000 in the account, you would have gotten a check for ,000. Now, when you go to perform the rollover, you must find a way to come up with that 20%! That means it is your responsibility to find ,000 to make up the difference. There is no need to panic too much because as long as you follow the rules, you will get the 20% back when you file your income taxes at the end of the year.

In addition to the 20% issue, you also have a time frame in which you must make the rollover complete. From the date the funds are distributed from the 401(k), you will have 60 days to complete the rollover. If you do not already have a Roth IRA account open, you will need to open a new account and make up that 20% that was lost to taxes. The rollover must be completed within 60 days.

Requirements for a Roll over from 401k to Roth IRA

Now that you have determined that you can roll your 401(k) to a Roth IRA, you must make sure that you will meet the eligibility guidelines for the Roth IRA. Of course, if you already have a Roth IRA, you do not need to worry about this. However, if you have to open a new Roth IRA, you must be aware of the Roth IRA rules. The most important factor is your income. Currently, in order to be eligible for a Roth IRA, your adjusted gross income cannot exceed 0,000 per year. If you exceed this amount, you will not be able to open a Roth IRA account.

If you do lose your job and have to rollover your 401(k), an IRA retirement account is your best option. A direct rollover is preferred, but it is not always possible. The process of rolling over your 401(k) to a Roth IRA is not complicated as long as you abide by IRA rules.

Frequently Asked Questions

  1. QUESTION:
    I have a roll-over IRA from a previous employer and an indiv ROTH IRA, what is the annual contribution limit?
    the roll-over ira and the roth ira are in different mutual funds, and I have been putting money into both accounts.

    • ANSWER:
      The annual IRA contribution limit is ,000. You can put it all in one account or split it between accounts any way you wish.

  2. QUESTION:
    How can you avoid the 10% penalty on a 401k, 403b, IRA roll-over?
    When does the 60 day time limit actually starts? When u roll over your IRA to an Annuity when is it considered a qualified or non-qualified?

    • ANSWER:
      To answer your questions, the best way to avoid the 10% penalty is to never have the funds sent to you, but directly to the institution you are putting them in. AN ANNUITY CAN BE A QUALIFIED IRA. In fact, there are many vehicles you can use. You simply set it up first, notify the company that you have the money with what you intend to do and then sign the proper paper work from each company and let them handle the money.

  3. QUESTION:
    I did not get a 5498 on my roll over IRA, and was told I will not get one unitl May?
    How does this affect my tax filling this year? Do I need the document to file? and if so how do I file by april 15th if I don’t get the document until may?

    • ANSWER:
      When was the rollover done? If it was done in 2007, show the gross amount on Line 15a and [FAQ-ANSWER] on line 15b of Form 1040. That tells the IRS that it was a non-taxable rollover. The 5498 information that they receive from the custodian will confirm that fact and all will be well. Just be SURE that it was a properly completed rolllover and verify that the amount in box 2 of the Form 5498 represents the total amount of the distribution and the rollover amount.

      If the rollover was done in 2008, it’s an issue for next year’s return but you’ll handle it the same way.

      At any rate, you don’t attach Form 5498 to your return so there’s no need to delay filing your tax return past the due date.

  4. QUESTION:
    Can I withdraw from my roll -over IRA-401K , if I am on disability ?
    I am 45, became disabled, 250K in a 401k. I rolled over into an IRA. What happen if I withdraw part of this money. I don’t think I will be able to live up to 59. can I withdraw everything at once.

    • ANSWER:
      Being disabled may get you out of the 10% penalty, but not the income tax. If you withdrew the entire 250k in one year, federal tax might be over ,000, plus state tax if that applies. If you draw it more gradually per year, your percentage of tax would be less.

  5. QUESTION:
    Can you combine a roll over IRA with a tax-deductible IRA?
    Or should a person keep them separate?

    • ANSWER:
      Yes. If you have a “roll over IRA” or a “conduit IRA” you can always roll it into an established Traditional IRA and have funds commingled. You can do this one of two ways after liquidating, 1) a check comes to you and as long as you deposit the funds back into a qualified (tax deferred) IRA within 60 days, you continue to have taxes deferred until you are eligible for withdrawals without penalties (59 1/2 yo); or you can have your custodian (bank) that holds the Traditional IRA request funds to be liquidated or rolled over in benefit of you and thus no penalties or taxes.

      So in short answer yes.

  6. QUESTION:
    what to do with a roll over IRA?
    My 401K at my previous job was turned into a roll over IRA after i left the job to go back to school. the funds are held as cash reserves fund under fidelity. Is it possible for me to use that money and invest it in an index fund? If so what is the procedure to do that and will I incur any penalties for doing that?

    • ANSWER:
      As long as whatever investment choice you make keeps the funds under the IRA “umbrella” you will not incur any tax penalties. You can either contact Fidelity to see what other investment options they have available for you, or if you prefer to work with someone else, that is fine. They can request an IRA transfer to move the funds from your rollover (the technical term is Conduit IRA) into an investment with them. Do not comingle these funds with any other IRA if down the road you wish to transfer them back into a 401K with a furture employer. (Although fewer and fewer employer plans allow this)

  7. QUESTION:
    Is it possible to roll over a ROTH IRA to use for the stock market?
    I currently have a roth ira at US Bank and I would like to somehow roll it over into my stock investment account. Would I be subjected to a penalty for doing so?

    • ANSWER:
      You will not owe a penny taxes if you transfer from one Roth to another.

      Just call charles schwab or another discount broker.
      Ask them for the forms to transfer your money from US bank to Schwab.
      US bank might charge you a small fee.
      I love shwab. My dad has been with them since 1982, and has never had a complaint.
      I have never been charged a fee for anything.
      No annual fees, no nothing – good people….

  8. QUESTION:
    Which IRA should I roll over my 401K?
    I’m changing jobs and I need to roll over my 401K plan.

    Currently I have a non-deductible IRA that I’m actively contributing and a SEP-IRA that I had when I used to be self employed. SEP-IRA is “inactive”, that is I can’t put any money into it as I’m not self employed.

    My question is, where do I roll over my IRA into?

    Can I open another IRA account, say a Roth IRA and roll it over there?

    Thanks for any advise. Preferably right ones!

    • ANSWER:
      A Roth is funded with dollars that you already paid income tax on, so you can’t put 401K dollars in it.

      Your previous employer will carry your 401K account until you make a decision, so there isn’t a rush to do anything immediately.

      Simply contact your stock broker (if you have one) or your banker and tell him you want to rollover 401K funds into an IRA account. They will send the necessary paperwork to the original 401K administrator and the funds will be rolled over into a new IRA Rollover account. It’s important that the transfer be made directly to the new account.

      However, if the plan is performing well with the old employer, you might want to leave it alone for the time being. I am not aware of any law or requirement that you move your account when you terminate your employment. If you have been receiving regular statements the plan administrator’s name should be on there someplace. Call them.

  9. QUESTION:
    Can I roll over my traditional IRA in my bank to a mutual fund company?
    Hi,
    I believe I have a traditional IRA with my bank and need to know if it is possible to roll it over to a mutual fund company? What is the process in doing so?

    • ANSWER:
      You can. But why would you?

      For more and more people that would NOT be the right thing to do! (and those who tell you otherwise, just don’t know yet!)

      First off, you could move your IRA to most any brokerage firm.

      Second, from there, you can buy/sell any of the mutual funds from any company you might want to park your money with. Why limit yourself?

      Third, why even use mutual funds??? There are better (and cheaper) instruments out there with the same level of risk, but lower costs (and thus higher returns).

      For instance, using ETFs. Just search my response on ETFs vs. Mutual funds, or contact me offline and I’ll let you know more.

      Hope that helps!

  10. QUESTION:
    Hi- How to correct wrong IRA roll over?
    Hi- I’ve rolled over my Roth IRA to another broker. During transition my Roth status disappeared. Now my account says IRA Rollover account. Broker tells me I’ve opened wrong account. How can I correct this problem?
    Thanks for your help.
    Chris

    • ANSWER:

  11. QUESTION:
    Where’s the best place to roll my Roth IRA over to?
    I currently have a Roth IRA with State Farm. Due to impending inflation, and my loss of confidence in the dollar, I would like to move some of my investments to precious metals and foreign currency investments. However, State Farm is pretty limited with their investment options, so I’m looking for the best place to roll my IRA over to which would offer a more diverse and easily customizable portfolio. Vanguard is one that I have been reading a lot of positive things about.

    Any suggestions or personal experiences are appreciated.

    • ANSWER:
      I use Vanguard and am very happy with them – via an account with Vanguard they offer you access to all mutual funds, ETFs, stocks, etc not just Vanguard funds. They also have the lowest fees in the industry. You could also check out Fidelity – they are also good.

      Commodties you could buy in a IRA via Vanguard include
      - PowerShares has a sugar, corn, soybean, and wheat ETF (DBA).
      - iShares Silver Trust (SLV) and streetTRACKS Gold Shares (GLD). They track the spot prices of silver and gold.
      - PHAG follows the silver spot price, while SLVR tracks the price of silver futures traded on the Commercial Exchange in New York (COMEX)
      - ETF Securities has a platinum ETF (PHPT),
      - Precious Metals Basket (PHPM), which invests in both platinum and palladium, as well as gold and silver.
      - United States Oil (USO) seeks to reflect the performance, less expenses, of the spot price of West Texas Intermediate (WTI) light, sweet crude oil.

      For foreign currency – I would suggest investing in the stock market of the nation’s currency you are interested in. If a currency is doing better than the $, then that nation’s stock market should also rise.

  12. QUESTION:
    Would the employer match amount gets forfeited upon a 401K roll-over to an IRA account?
    Upon retirement, a 401K account with employer & employee match amount upon direct roll-over to an IRA account shall not have the employer match amount forfeited & not included on the total match distribution. Are some employers forfeiting their match anyway & for what justification?

    • ANSWER:
      Just because you retire, doesn’t necessarily mean you get to keep the employer match. Most have a vesting schedule: 20% @ 1 yr, 40% @ 2 yrs, 60% @ 3 yrs, 80% @ 4 yrs, and 100% @ 5 yrs. Most vesting schedules go 5 years. If you’ve been with the company 5 yrs, you get 100% of the company match.

      I’ve done two 401k rollovers. I got the monies I was entitled to, per the vesting schedule.

  13. QUESTION:
    Will I lose any money if I roll over my 401k to a bank IRA?
    I’ve have money from a previous job from a 401k plan. I no longer contribute to it, so it’s gaining little interest. If I roll it over to an IRA, will I lose any of it to the government. And also what is the difference between a traditional IRA, and a Roth IRA?

    • ANSWER:
      The previous answer is correct, but I’ll expand on it a bit since you also had a second question.

      Both traditional IRA and Roth IRAs are tax deferred accounts. The main difference is that money in a traditional IRA is taxed as ordinary income when you withdraw it. However, your contributions are tax deductible if your income is under a certain amount. Money that is contributed to a Roth IRA can be withdrawn tax free if you hold it in the account for a minimum period of time but there is no tax deduction for contributions. Your contributions to a Roth IRA may also be reduced or eliminated if you make too much money.

      There are also some other differences. Download Publication 590 from www.irs.gov for more information.

      You cannot roll over 401k funds directly to a Roth IRA. However, you can roll them over to a traditional IRA and then convert it to a Roth IRA. However, there may be tax consequences to this. See Publication 590 for more information.

      Contact your bank and request a rollover. They should be able to help you with this. As long as the money goes directly from your 401k plan to the new IRA trustee, then there will be no tax consequences. You could have problems if you have the money sent directly to you and you fail to re-deposit it in the IRA correctly.

  14. QUESTION:
    Will I be able to roll over my employee’s 401K to a Scottrade Roth IRA?
    I opened a Roth IRA with Scottrade for the purpose of rolling over my previous employee’s 401K into my roth IRA however the representative told me I have to first open a traditional IRA and roll over my 401K into that and then move it into my roth IRA. This doesn’t make sense to me, has anyone ever had this happen to them?

    • ANSWER:
      That used to be required because employee retirement plans and IRAs fall under slightly different rules (IRS Publication 575 would apply to 401k, and Pub 590 for IRAs). Judging from http://www.irs.gov/publications/p575/ar02.html#en_US_publink1000226942 that is no longer required.

      But for accounting purposes it should be no great hardship to open an IRA account at Scottrade, arrange direct trustee to trustee transfer of your 401k to that, then convert that to your Roth IRA. I can do IRA to Roth IRA conversions at Fidelity with a phone call.

      You will have to pay income tax for the conversion. But instead of having that withheld from the conversion, it is best to cover the tax with outside money. Otherwise the withholding would be subject to tax and 10% penalty. I cover conversion tax with a W-4 withholding adjustment (less allowances than I would otherwise take).

      I have been gradually converting over a number of years to keep from bumping into a higher tax bracket. But there is a special deal for 2010 to spread IRA to Roth IRA conversion tax over 2011 and 2012.

  15. QUESTION:
    How much can i roll over to me Roth IRA?
    I make about 48k a year and have 20k in 401k. I want to roll it over to a Roth ira. I want to avoid bumping me into the next tax bracket. How much could i rollover for this tax year 2009 without going over to the next tax bracket? How much can i rollover next year? What is my tax bracket?

    I am filing single.

    • ANSWER:
      If the 401k is from your current employer, you probably cannot transfer it anywhere. You can only transfer or convert 401k assets from a “former” employer.

      If you are single you are probably in the 25% bracket anywhere from 48k to 68k, so it is not the tax rate that would matter much. What matters is how much tax money you can or are willing to come up with from sources other than your 401k each year when deciding how much to convert at a time.

      There is tax, but no penalty on the amount converted if you pay the tax with other money. But if tax is withheld from the conversion, that withholding would be subject to 10% penalty if under age 59.5. I am converting about ,000 per year from IRA to Roth IRA, but have the tax covered by a W-4 withholding adjustment (less allowances) and specifically tell my trustee not to withhold anything from conversions.

      But something to be aware of is that there is a special deal in 2010 only for anyone to convert tax deferred retirement funds to a Roth IRA and spread the tax over 2011 and 2012. So you might want to wait until 2010 to make the conversion to give you more time to pay the tax from other income instead of from the conversion.

  16. QUESTION:
    Late on 401k roll over to IRA Account?
    I would like to roll over my 401k from my former employer to my IRA trading account. I have exceed the 60 days limit set by the IRS to make this transfer. What is the least penalized option available that I can take to make this transfer. Thank you for your time.

    • ANSWER:
      depends on what you mean by exceeded the limit. Did you take a cash distribution first and then decided to roll it over? Did you take a rollover distribution and then simply haven’t forwarded the check?

      The rule is that when you take a distribution you have 60 days following the receipt of the check to have it deposited into the receiving plan (IRA or qualified). So, if you took the cash…you are out of luck. You can apply to the IRS for a waiver but you will need serious extenuating circumstances. There are no penalties to pay…you simply can’t roll the money over. It’s now after-tax so you may as well make it ROTH money.

      If the check was a rollover check and you simply didn’t forward it in time….go back to your old employers 401k and tell them you never received the check. They will stop payment and reissue and you will be within the 60 day window.

      If you haven’t taken the distribution yet and it’s been 60 days since you left employment???? No worries. Take your rollover distribution and complete the transaction. You’re within the window.

  17. QUESTION:
    When rolling over an traditional IRA to a Roth IRA, is it required to roll the entire amount?
    Is it possible to roll partial amounts over a period of years.

    • ANSWER:
      you can convert (not “roll” officially) any amount of your traditional IRA into a ROTH IRA (highly recommended by the way) but you must take into consideration certain things.

      1) taxes….it does go down as a distribution of your ira so it does become a taxable liability BUT doing a conversion eliminates the pre-59.5 penalty for withdrawing out of the ira under normal circumstances

      2) how much you make in a year….if your MAGI is 0k or over you cannot convert any of your traditional IRA into a Roth IRA, this figure does not matter if you file single, jointly or whatever, if your household makes over 0k (this includes not just income from working but also dividends from stocks, capital gains from othe rinvestments as well as interest from savings, bonds, etc) you cannot convert your ira as planned

  18. QUESTION:
    How do you roll over 401k funds into a Roth IRA when you switch jobs?
    I just switched jobs about 3 weeks ago and have not done anythign with my 401k yet. I want to roll this over into a Roth IRA, I only have about ,000 in my account since I opened it recently. Can I move this over without any penalties? How do I go about doing this? Do I need to contact my old job or can I do it on my own? I want to set up a Vanguard target retirement account. Thank you

    • ANSWER:
      You can only do that if it was a Roth 401k. Contact Vanguard, and they will help you through the process. If it is a normal 401K, then put it into a Rollover IRA (at Vanguard, if that is your choice). For future contributions, you can just open up a Roth IRA.

  19. QUESTION:
    Can I roll over my SEP IRA account to my 403B ?
    prevously I worked for a Dentist Office for 6 years and she opened up a SEP IRA account for me at a local bank.. now I’m working for a hospital and we have 403B, there is some moneys in the SEP I think almost 5,000, can I roll it over the my 403B plan at the hospital? Will the Dentist know that I roll it over?

    • ANSWER:
      Some 403b programs do allow for rollovers, but this may not be the best solution for you.

      While a 403b is a powerful program, you should limit your deposits to your payroll deductions at work. The reason is diversification, two plans will insure that if you make poor choices in one the other will hopefully be doing better. you will not be able to take the money out of your 403b until you are 59.5 without some serious penalties so think it over before you make a change that you cant undo.
      I am not a fan of going it alone with your investments. people make mistakes when they get emotional with their investing. an adviser can make sense of turbulent markets or at the very least keep you from loosing your good sense.
      if you can find a trusted adviser who you let assist with your SEP, if they will help you choose investments in your 403b you may have a good match, and a second pair of eyes can never hurt!

  20. QUESTION:
    What is the best financial house to roll-over an IRA?
    that has interest on monies when they are not allocated. and a low stock trading fee.

    • ANSWER:
      The reality is that there are good, bad, and crooked investment advisors at every investment house.

      Rates of return on their competing products are not nearly as important as knowing they are looking out for your best interest.

      I would seek referrals for advisors in your area who also have advanced designations (CFP, CIMA, ChFC, etc), then I would background check them through the NASD website.

      Hope that helps!

      Ken Clark
      Certified Financial Planner

  21. QUESTION:
    Can I roll over my present 401K into my old SEP IRA?
    I have a 401K plan now with about ,000 in it.

    I need to roll it over into either my old SEP-IRA account or my non-deductible IRA.

    Can I roll my 401K into my SEP-IRA? I don’t really want to roll it over into my non-deductible IRA.

    I also don’t want to open a Roth-IRA as it’ll put me in a too high of a tax bracket.

    Thanks for any advice.

    • ANSWER:
      Yes, you can. One of the most significant pension reform provisions of The Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) is the enhanced portability of Retirement Plans. Check out the link under Source.

      Hope that helps.

      PLEASE VOTE to avoid a TIE. On behalf of all of your responders, who take the time and effort to help questioners in this free Yahoo! community, THANK YOU in advance for taking the time to choose your “Best” Answer. We really appreciate it.

      DISCLAIMER: While the information in this response was obtained from sources believed to be reliable, its accuracy and completeness cannot be guaranteed. The opinion voiced in this answer is for general information only and it shall not be construed as tax, legal, or investment advice for any individual, nor shall it be considered a solicitation. Questioners are urged to consult with their professional advisers before making any decisions regarding their finances.

      Bradley Mann, CFP®, EA, BCE, CFS, AAMS
      Certified Financial Planner Practitioner
      Enrolled Agent | Admitted to Practice before the IRS
      Board Certified in Estate Planning

      “Providing sound retirement opportunities and tax-reduction strategies since 1985.”

  22. QUESTION:
    The IRA CD I own has two years remaining to mature, should I cash out and roll over it into a 403b?
    The IRA CD itself is a five year cd, only earning 1.2% with two years left, and it is worth about ,300. I have a fidelity account through my workplace and the investments that I have, I’m earning an AVG of 10% a year. Should I “roll over” the IRA into my 403b or should I let the cd mature?

    Thanks..

    • ANSWER:
      It would be nice to earn a little more than 1.2%. My question would be what is the structure of your 403b? I’m in a 457b and have limited investment options through my 457b plan administrator. Most of the mutual funds offered just aren’t very good.

      My IRA, however, is with a full service broker, and I have my choice of funds, stocks, bonds, ETFs, etc. So I have no desire to move any funds out of my IRA account.

      If you like your 403b plan, then roll it over. Otherwise consider rolling your IRA CD into an IRA brokerage account where you’ll be free to buy money market funds, mutuals, stocks, whatever you like.

      And keep contributing to your IRA as well if you have the money.

  23. QUESTION:
    Can an IRA roll over into a 401(k)?
    My wife has an old IRA, and she is getting ripped off on it with something like a 1.9% annual return. I have a thriving 401(k) and wanted to know if I can roll her IRA over into my 401(k).

    Thanks for your help!

    • ANSWER:
      No. It is not possible to move it this way (gotta love the IRS). Rollovers have to match registrations.

      1.9% does not sound too good. Why not move the investments around within the IRA? If it is at a bank (think FDIC insured) your only options are a CD or savings account within the IRA. Steady, but BORING. Consider a brokerage IRA with a couple good, diversified mutual funds.

  24. QUESTION:
    How to roll over 401k(IRA) to buy a business without tax consequences. Passed age 62. And if that business ..?
    contiue question: And if that business fail or succeed how to proceed with taxes.

    any tips.

    • ANSWER:

  25. QUESTION:
    Can I roll over 457 retirement plan (set up with a non-profit) into an IRA?
    The original non-profit company is now out of business, and the last contribution was 10 years ago. I am 63 and still working. If the 457 can’t be rolled over into IRA, what exactly are options to avoid taking total payment in a single year and yet still receive systematic withdrawals? The 457 plan is currently with a large full service brokerage, and the agent believes my only option is to annuitize the full amount. However, fees are enormous with this option. Do I have any other options?

    • ANSWER:
      It depends on when it comes due…

  26. QUESTION:
    If own stocks in a 401k and then roll it over into an IRA am I forfeiting those stocks?
    If your 401k is invested in different funds when you roll it over into an IRA will you be not invested in the same funds anymore and be forfeiting the stocks you own at that point?

    • ANSWER:

  27. QUESTION:
    Can I roll-over a Traditional IRA into a Roth IRA prior to April 15, 2009 and claim the income for 2008?
    I want to claim the income for 2008 (without increasing my taxable income bracket) and also claim for next year – 2009– in 2010. Does the rule for opening a IRA before April 15 also apply to roll-overs prior to April 15?

    • ANSWER:
      no it must be done by 12/31 to claim for 2008

      i suggest you do it now so you can get benefit of the recent market down turn if you eait until april the market could be higher

      if you are concerned about income roll over part in 2008 and the the rest in jan 2009 and split up the tax liability

      remember this ADDS to your income and can impact other areas of your return

  28. QUESTION:
    What legislation will allow anyone to roll over a Trad IRA into a Roth IRA without penalty in 2010?
    Suze Orman wrote an article Nov 20, 2006 for Money Matters and it is posted on Yahoo Finance titled An IRA Nest Egg you Cant Pass up. Can you please refer me to this legislation because my broker doesnt seem to know anything about it and I cant find it. Thank you.

    • ANSWER:
      Conversions from Traditional IRAs to Roth IRAs have never been “penalized”. This issue has been that if you make over 0,000 per year, you can not do it. In 2010 the income limit goes away so anyone can do it. The conversion is still taxable but you can spread the tax bite over 2 years (2010 and 2011).

      Of course….I can not find a link right now….

  29. QUESTION:
    Can I roll over an IRA from a previous company into a 401K at a new company?

    • ANSWER:
      The only thing you can roll an IRA over into is an annuity. That’s it.

  30. QUESTION:
    Does anyone know if I can roll over my simple IRA into something else?
    I want to be able to borrow against the money but I can’t do that as long as it is in an IRA. Any suggestions?

    • ANSWER:
      Unfortunately, you can’t borrow against any type of IRA plan, as you know. Also, the 2 year period surely does apply for any type of SIMPLE IRA. The two year clock begins when in the tax year in which you make the first contribution to your SIMPLE. If you take any distributions before that time expires, you will be subjec to 25% penalty. Also, if you are under 59.5 andhave contributed to the plan for more than 2 years, your distribution will be subject to a 10% penalty.

      This is something to think about, as any funds that you take out will be assessed a penalty in your case (unless you’re over 59.5). And since you can’t do a rollover into a non-qualified account (non-retirement, basically), the only way to gain access to the funds is to take an early distribution. I would weigh the benefits and costs before acting. Is it really important for you to have these funds? I hope this helps!

  31. QUESTION:
    Will I be taxed on a roll over investment from IRA to a self-directed IRA? I’m 57 yrs old this year.?
    I lost on this investment and continue to pay my custodian 0.00 annually. I plan to terminate this plan but will I be taxed for the money I rolled over to a self directed IRA?

    • ANSWER:
      As long as you go from a traditional IRA to another traditional, you’ll be fine.

      If you go from a traditional to a Roth IRA, that would result in a taxable event.

  32. QUESTION:
    What’s the maximum amount of money you can roll-over from TSP into an IRA account?
    Lets say, hypothetically, I have about 0,000 in a Thrift Saving Plan account I have from being in the Air Force for 20 years. I’m going to retire and I wanted to throw it all into an IRA account and start investing online with an online broker of some sort. Could I roll over the entire amount or is there a maximum allowed? What would be the better choice of IRA accounts with this kind of money? Roth? Traditional?

    • ANSWER:
      I am not an expert in TPS plans. They seem to be similar to gov sponsored 401(k)s.

      http://en.wikipedia.org/wiki/Thrift_Savings_Plan

      It look to me like this is not a problem. if you roll it over you MUST do it in an “IRA Rollover.”

      If you roll it over to a Roth the ENTIRE account will be subject to ordinary income tax. if you are under 59 1/2, the IRS will tack on an additional 10% penalty of the gross.

      I would be very cautious of putting your money in an on-line broker and start gambling with it in the market. You could wipe out your retirement and then what?

      If you have lots of assets I would seek the advice of a professional advisor with 15+ years retirement planning and market experience.

      Good Luck!

      Common IRA Rollover Mistakes

      http://www.investopedia.com/articles/retirement/06/rollovermistakes.asp

  33. QUESTION:
    My 10k dollars has become 32.6k in a roll over IRA in a sock/bond mutual fund in 13.5 years. Is it acceptable
    It is invested in a diversified stock/bond mutual fund of a famous mutual fund company with reinvestment of distribution.

    • ANSWER:
      That is an average rate of a little over 9 percent per year. It is acceptable but it is also a matter of your own expectations and tolerance for taking a risk.

      Some would say you should be getting 11 to 13 percent per year in stocks and bonds. I personally would be quite happy if all of my savings made 9 percent per year. At 9 percent per year, in 20 years you will have about 58,000 dollars.

      If you are interested, the formula for figuring the growth of money over time is:

      Savings = P* (1+i)^n

      Where P is the principle or initial investment

      i is the interest rate as a decimal; 9 percent would be .09

      n is the number of years

  34. QUESTION:
    Can I roll over an inherrited IRA annunity from my ex-husband into an inherrited IRA and not pay taxes?
    I have been told by Chase Bank that I cannot put an inherrited IRA annunity from my ex-husbank into an inherrited IRA account without paying taxes. A CPA told me that is not true and that it can be done. who is right?

    • ANSWER:
      No. A non-spouse beneficiary canNOT rollover or transfer an inherited IRA into his or her own IRA. This tax-advantaged treatment is reserved for spouse beneficiaries, only. But this doesn’t mean you’ll be hit with a tax bill, all at once.

      First, I’ll have to make some assumptions based on the info in your question. The annuity is the product your ex invested in with his IRA money. His annuity listed you as beneficiary. And you’re asking whether you can “put” the IRA money you inherit from his IRA into your IRA, or another IRA, and avoid paying taxes. Yes? Looks like the bank got it right, and the CPA…well.

      Only a surviving spouse can roll over a deceased spouse’s IRA into his or her own IRA, without tax implications, and treat it as their own. So, if that’s what your CPA meant, he or she is incorrect. Instead, the account would become a beneficiary IRA under your ex’s name, with you as beneficiary. As a non-spouse beneficiary, you must begin taking RMDs (required minimum distributions) each year, beginning in the year after the IRA owner’s death. These RMDs will be based on your life expectancy, reduced by “1″ each year. The IRS 10% early-withdrawal penalty for beneficiaries under age 59 1/2 is waived.

      Hope that helps.

      On behalf of all of your responders, who take the time and effort to help questioners in this free Yahoo! community, THANK YOU in advance for taking the time to choose your “Best” Answer. We really appreciate it.

      DISCLAIMER: While the information in this response was obtained from sources believed to be reliable, its accuracy and completeness cannot be guaranteed. The opinion voiced in this answer is for general information only and it shall not be construed as tax, legal, or investment advice for any individual, nor shall it be considered a solicitation for clients. Questioners are urged to consult with their professional advisers before making any decisions regarding their finances.

      Bradley Mann, CFP®, EA, BCE, CFS, AAMS
      Certified Financial Planner Practitioner
      Enrolled Agent | Admitted to Practice before the IRS

      “Providing sound retirement opportunities and tax-reduction strategies since 1985.”

  35. QUESTION:
    Can I contribute to my 403(b) and my roll over IRA at the same time?

    • ANSWER:
      Yes and no. As soon as you add to the rollover IRA, it ceases to be a rollover IRA, and becomes a normal IRA. You CAN contribute to the 403(b) and an IRA at the same time.

  36. QUESTION:
    Can i roll over my money from my 403b into my ira while still employed at the same company?
    I am younger than 59.5 and plan on staying with the same company for a while which offers a 403b program. Can I roll over part or all that money in the 403b into my ira? Also would I still be able to deposit 00 into my ira in addition to the 403b roll over in the same year?

    • ANSWER:
      Usually not. Read the summary plan description for your specific 403(b) plan.

      A rollover of a 403(b) into an IRA does not count as an IRA contribution. Your eligibility to contribute to the IRA depends on your income.

  37. QUESTION:
    I have a sar sep stockmarket funde retirement plan that I want to roll over to a ira, is that feaseable?
    I will be 58 this year and the stock market just keeps looking like its ready to roll over and die, and to me the future looks bleak there and I want to dump my stocks in my sar sep plan and roll them over into a IRA. Money market offers by the banks look pretty poor

    • ANSWER:
      I think you are confusing the TYPE of plan with the FUNDS in the plan.

      SAR SEP plans are very similar to 401(k)’s, so they can be rolloever to another qualified TYPE of plan, like an IRA.

      The funds/stocks inside the TYPE of plan is really what you are talking about here. So, whether the stocks available thru the funds in your SAR SEP plan is better or worst then the stocks offered thru funds in the new IRA is a matter of debate and personal choice.

      I have a tip for you that you might consider: what if I told you that the world neither gains or loses money, it just switches hands? That is the whole premise behind “diversification”. So, if the US stock market is suffering, guess what? Some other country is gaining! Consider diversifying to other international markets in your current or new plan type!

      You have about 10-15 years of pre-retirement time, and another 15-20 years after…even the US market has always showed a healthy return over a 35 year period, so consider being happy with buying the stocks now while prices are LOW.

      And don’t forget to check for any fees involved…some plans charge to pull the money out and some charge an annual fee for managing your new IRA! So, compare the overall cost and make sure it is worth the effort to rollover.

      Lastly, rollover DIRECTLY. Do not take possession of the money or your risk missing your 90 window and then it most definitely will hurt you in the long run!

  38. QUESTION:
    Can I roll an IRA Cd over into two different Mutual funds?
    I removed funds from a bad producing IRA CD. I have been advised that I have 60 days to reinvest the money. Can I split the proceeds between two other funds, or do I have to reinvest the total sum in only one fund?

    • ANSWER:
      Just make sure you make the purchase in an IRA account…..set one up…. Fidelity, Vanguard, whoever…and keep those records !!.. Once you’ve set it up…you can trade on-line into any fund you wish or even venture into ETF’s or individual stocks…….

  39. QUESTION:
    Is it possible to roll over 401K to IRA then buy stocks and if it makes money?
    take some of the money out?

    • ANSWER:
      generally funds have to remain within the rollover IRA. Before retirement age the only provision I know to remove money without penalty is section 72t, substantially equal periodic payments.

  40. QUESTION:
    How can I roll over a 401K to IRA if I’ve moved to France and no longer have US residency?
    We moved in August, so have spent most of the year in the US and will be paying taxes there this year. It’s my husbands 401K and he’s a Danish citizen (I’m american) but also US green card holder. All IRA rollover applications say non-residents need not apply. They are closing his company in the states and we have to do something this month!

    • ANSWER:
      If you are already a resident of France, you can’t. You have to take a withdrawal first so it can be taxed (possibly 30%). You know the IRS wants their money.

  41. QUESTION:
    How do I roll my 401(k) over to a traditional IRA?
    I have a retirement plan with my former employer and I want to roll it over to a traditional IRA. What are my other options?

    • ANSWER:
      Just go to vanguard.com or any of the brokerage firms (Vanguard usually has the lowest fees), sign up for a rollover IRA account, and follow the directions they give you. It usually involves filling out a form and submitting that to whatever company is managing your old 401(k).

  42. QUESTION:
    Can you roll over money from your TSP to a Roth IRA?
    If I leave my current job…that has a TSP retirement savings plan, it’s basically a 401 K, can I roll that over into a Roth IRA? If not….if I take it out….it will get taxed….and then when I put it into a roth IRA will it get taxed again…..causing it to be taxed twice?

    • ANSWER:
      First, you must roll it into a traditional IRA. Then, you can transfer it into a Roth IRA. Upon the transfer into the Roth, it will be taxed as ordinary income, but the funds will then grow tax-free. Depending on how soon you intend to fully retire and begin taking distributions, this may or may not make sense. Most financial advisors or planners can help you with the calculations at no charge.

  43. QUESTION:
    Can I roll-over a after-tax IRA and traditional IRA to a Roth IRA?
    I have a Primerica IRA & Texa$aver 401(k) (this particular IRA I contributed to when I worked for a Texas school district 15 years ago) that I would like to combine & roll-over to a Roth IRA. I have not contributed to either for years. I feel like I would benefit by combining them and contributing to a Roth.

    • ANSWER:
      You would pay the taxes on the traditoanl IRA now, but you could do it…Dont forget Roth Limits are 4000 below 50 and 5000 above…So im guessing you have more than that in your IRA’s combined… so definitely get rid of the Primerica IRA because they are garbage sold by part timers that know nothing!!

  44. QUESTION:
    401k to IRA roll-over ?
    Am I allowed to roll-over ( or convert ) my post-tax contributions that I made to my 401K to a Roth IRA?
    I can not contribute directly to a Roth due to the MAGI cap restrictions. But I have read that there is no MAGI cap if you roll over into a Roth.

    • ANSWER:
      First you either can no longer be employed by the employer through whom you have your 401K or your employer’s plan must have a provision to allow it.

      There are still MAGI restrictions for roll-overs it is just that they have been rasied significantly – check IRS.gov for specifics and details.

      The next best or just really the best step is to contact the actual investment firm or firms that your 401K funds are deposited/invested – the actual fund accounts be it in FIdelity, Vanguard, etc. funds. They will be able to help you properly execute any qualifying transfer amounts (they’ll send some forms for you to sign and return) and avoid several possible problems.

      Note that you can/should request the roll-over transfers to be ‘transfers-in-kind’ which means the specific investments will remain the same without having to sell or liqidate to transfer and then repurchase upon deposit.

      Post-tax 401k contributions roll-over to a Roth IRA is or should be a very straightforward transfer.
      Any earnings, or pre-tax contributions, or employer match amounts will need to be done separately and as a Roth ‘conversion’ or more simply as a roll-over to a Regular IRA account type and will have tax liabilities to consider.

      May your effort involve amounts with many significant digits.

      ‘_’

  45. QUESTION:
    What government agency regulates employer match amount forfeiture upon a 401K roll-over to an IRA account?

    • ANSWER:
      It’s not a government agency. It is the terms of your plan that matter.

      Most plans have a vesting schedule over 4-5 years for matching contributions. If you leave, get laid off, or get fired before you are fully vested, then you lose the unvested portion.

  46. QUESTION:
    where would you put a roll over IRA from a former employers 401?

    • ANSWER:
      depends on your objectives? safest play is Vanguard.com . If you want to trade stocks in it, then schwab, fidelity or ameritrade. i would avoid etrade.

  47. QUESTION:
    when am I allowed to roll a traditional ira over into an existing 401k ?
    what are the rules that would allow this?

    • ANSWER:
      It must be pre-tax.
      Can not be inherited IRA
      You must sell all your stocks and funds
      Please talk to your HR person.
      I personally do not see any advantage in doing this.
      /

  48. QUESTION:
    Can I roll-over my IRA to my 401 (k) plan from my company?
    The IRA contributions were from the last 2 tax years, and the performance has not been as good as what I have had in my 401 (K) plan from a company that I have retired from.

    • ANSWER:
      Um… NO

  49. QUESTION:
    How can you roll over money from 1 Roth IRA to another without any penalty?
    I have shares of a mutual fund in a Janus account that I want to sell and move that money over to a Schwab Roth IRA that I have. How can I transfer it?

    • ANSWER:
      Ditto above. The money has to be transfered from one IRA account to the other without ever having been received by you. If you received the money even to redeposit you would have withdrawn and be subject to the specified penalties.

  50. QUESTION:
    can i borrow loan from roll over ira?

    • ANSWER:
      You can not get a loan from an IRA. 401k and 403b’s are the only types of qualified accounts you can borrow against. If you have a Variable Universal Life policy, you can take a loan on that.

      Also, if you are under 59.5 and need to pull money from your IRA, you will be hit with either a 10% penalty or you will have to take systematically equal payments from your IRA for 5 years or until you reach 59.5 whichever is longer.

      Hope this helps.