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Old 11-02-2012, 07:48 AM   #21
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Originally Posted by scrabbler1 View Post
Aren't there tax rules for doing a direct rollover from a 401(k) to an IRA? That is, you have to do the rollover within 60(?) days or else face tax penalties (even if you can recover the money later)? When I left my company, I had to liquidate my 401(k) and did a direct rollover into an IRA about a week after I got the check which was made out to the new IRA administrator (Fidelity) to shield me from any tax issues.

Therefore, doing DCA was not an issue because the rollover was a lump sum.
I think what he's saying is he could roll all of it at first into a "safe" fund such as money market, then move it via DCA to equities.

I don't think there's an exact answer for the timeframe...but I'd do it over about 9-12 months. That said....if we see a market correction of about 5-8% or more...I'd get it in there more quickly.

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Old 11-02-2012, 07:52 AM   #22
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I did a trustee to trustee transfer years ago. One thing to keep in mind is that in a 401(k) you can get at your money without a 72(t) if you are going to withdraw it from the year that you turn 55 until 59 1/2.

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Old 11-02-2012, 08:37 AM   #23
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Originally Posted by pb4uski View Post
What was the $450k invested in (broadly, not tickers)? If in some broad based stock and bond funds, I would just dive right in and perhaps adjust to your target AA at the same time if it is a little out of whack. In other words, even if you think equities are high right now you are selling high and buying at the same level.
When I did my Rollover IRA in late 2008, I was faced with this same issue when I received the lump-sum check (not made out to me directly, of course) to present to the new trustee (Fidelity). By the time I emptied the 401(k) I had only 2 funds in there, an S&P 500 index fund and a stable return fund (which was most closely like an intermediate-term, investment-grade, corporate bond fund).

But I had forgotten to check the individual balances on the 2 funds on the day the 401(k) was emptied so I did not have the final AA I wanted to use to open 2 similar funds at Fidelity a week later. I did not think to call a rep at the 401k) trustee's office until the morning I went to Fidelity and he did not have that info readily available so I had to sorta wing it and make a best guess when I split the money up at Fidelity. Turns out I came pretty close, only 1-2% off from what it was (and I was okay with my "new" AA).

I could have simply dumped it all into Fidelity's cash account (Cash Reserves) and gradually bought shares of my desired funds. [ This appears to be more closely related to what the OP was asking about.] If I thought the rapidly unstable market was going to fall some more, this would have been a decent strategy as long as and forgone dividends would be recovered by buying at lower prices. I pretty much bought in at the bottom but then again I sold out (emptied the 401(k)) at the bottom, too.
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Old 11-02-2012, 10:24 AM   #24
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As BSSC aluded to above, if you leave your company in the year you turn 55 (or later) and you think you might need some of the money in the 401K before 59 1/2, you can take distributions from the 401k without the 10% penalty. If you're younger than 55 (or over 59 1/2) then this wouldn't apply to you.

Also, if you have any Traditional IRAs that were non-deductible (i.e. have basis) that you are considering converting to a Roth IRA, you should probably do that before you move this 401k money to an IRA.
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Old 11-02-2012, 11:11 AM   #25
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Originally Posted by bssc View Post
I did a trustee to trustee transfer years ago. One thing to keep in mind is that in a 401(k) you can get at your money without a 72(t) if you are going to withdraw it from the year that you turn 55 until 59 1/2.
Yes, also, in my state, 401(k) distribution qualifies for retirement income exemption when you reach 65 -- IRA distn does not. If you roll 401(k) to IRA you may lose this exemption if this is only source of qualified retirement income.

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