Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Tranfering 401(k) to IRA back to 401(k)
Old 09-22-2009, 04:50 PM   #1
Confused about dryer sheets
 
Join Date: Sep 2009
Posts: 2
Tranfering 401(k) to IRA back to 401(k)

Hi,

My wife has a 401(k) account through her old job. We moved across the country and did not do anything with the account. Now that I have more knowledge about retirement accounts I want to transfer it to an IRA.

We plan to move back and my wife working at her old job. The catch is we don't know when we are moving back because we are trying to sell our house. Can I transfer the 401(k) to an IRA and then transfer it back to the 401(k) once she is back at her job?

I want to add additional funds to the account, and therefore the reason for moving it to an IRA. But I also don't want my wife to start at $0 with the 401(k) when she eventually gets back to the old job.

Recommendations? Thanks.
__________________

__________________
dennisbaker is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 09-22-2009, 04:57 PM   #2
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jun 2005
Posts: 8,616
Some plans (like the one I am in) do not allow one to transfer in money. Check your SPD to make sure that's a possibility.

It used to be that you could not co-mingle your "rollover from a 401(k) IRA" with your other IRAs. I think the idea was that you could then roll it back into a 401(k). Once again, check with the plan to see what they allow. In any event, I would not co-mingle just in case.

And what's wrong with starting a new 401(k) at $0.00? Just add in the outside rollover IRA mentally if it bothers you.
__________________

__________________
LOL! is offline   Reply With Quote
Old 09-22-2009, 05:09 PM   #3
Confused about dryer sheets
 
Join Date: Sep 2009
Posts: 2
Thanks LOL.

I figured why start at $0 if when we leave the money in the account, and once she starts putting money back into it, the total increases at a higher rate due to compound interest.

My next step was contact the company that we have the 401k with. I am also thinking we might transfer it over, since we don't know when we are going to move back, and if it is a couple of years, that could be extra time & money that we can invest into the account.
__________________
dennisbaker is offline   Reply With Quote
Old 09-22-2009, 05:55 PM   #4
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jun 2005
Posts: 8,616
Wouldn't the total of compound interest from (IRA_from_old_401(k) + new_401(k)) give the same result as compound interest from (new_401(k) + money_added_from_IRA_from_old_401(k)_to_the_new_40 1(k))?
__________________
LOL! is offline   Reply With Quote
Old 09-22-2009, 06:03 PM   #5
Thinks s/he gets paid by the post
 
Join Date: Jan 2006
Posts: 2,928
Yes, assuming same growth rate (Q + I)(1+r)^n = Q (1+r)^n + I (1+r)^n
Q= 401K Qualified plan, I = IRA, r= growth rate, n= yrs.
__________________
kaneohe is offline   Reply With Quote
Old 09-22-2009, 06:20 PM   #6
Moderator Emeritus
Bestwifeever's Avatar
 
Join Date: Sep 2007
Posts: 16,373
Also there are more options for an IRA--you can send the $$ to Fidelity, Vanguard, Schwab, whatever, and pick whatever funds/stocks/CDs etc. you want, not limited to the 401(k) plan's choices.
__________________
“Would you like an adventure now, or would you like to have your tea first?” J.M. Barrie, Peter Pan
Bestwifeever is offline   Reply With Quote
Old 09-22-2009, 06:55 PM   #7
Moderator
Sarah in SC's Avatar
 
Join Date: Sep 2005
Location: Charleston, SC
Posts: 13,456
My gut reaction is to send it to an IRA, then you aren't dependent on maybe going back to the old company, plus the choices you can have.
However, if you are close to 55, there are some special options for taking withdrawals from the 401k that are not available in the IRA. That would be the only reason to leave it in the 401k.
Some plans may let you roll outside money into them, it depends on the plan. If the admin at the firm doesn't know, ask to speak to the TPA that prepares the 5500 each year--it is probably an actuarial firm.
__________________
“One day your life will flash before your eyes. Make sure it's worth watching.”
Gerard Arthur Way

Sarah in SC is offline   Reply With Quote
Old 09-22-2009, 07:13 PM   #8
Thinks s/he gets paid by the post
 
Join Date: Jan 2006
Posts: 2,928
Quote:
Originally Posted by Sarah in SC View Post
However, if you are close to 55, there are some special options for taking withdrawals from the 401k that are not available in the IRA. That would be the only reason to leave it in the 401k.
.
Better creditor protection?
__________________
kaneohe is offline   Reply With Quote
Old 09-22-2009, 07:27 PM   #9
Moderator
Sarah in SC's Avatar
 
Join Date: Sep 2005
Location: Charleston, SC
Posts: 13,456
Nope, it is a rule that says you can take distributions from a 401k penalty free from a 401k if you separate from service at age 55 or after.
__________________
“One day your life will flash before your eyes. Make sure it's worth watching.”
Gerard Arthur Way

Sarah in SC is offline   Reply With Quote
Old 09-22-2009, 07:57 PM   #10
Thinks s/he gets paid by the post
 
Join Date: Jan 2006
Posts: 2,928
Sarah,

sorry for the miscommunication......should have quoted only the last sentence.
Suggesting that another reason to stay in 401K is bettter protection against creditors .
__________________
kaneohe is offline   Reply With Quote
Old 09-22-2009, 08:33 PM   #11
Moderator
Sarah in SC's Avatar
 
Join Date: Sep 2005
Location: Charleston, SC
Posts: 13,456
Ah, that makes more sense, thanks!

Up to $1 million in IRA assets have the same protection. After that, Bob's your uncle.
__________________
“One day your life will flash before your eyes. Make sure it's worth watching.”
Gerard Arthur Way

Sarah in SC is offline   Reply With Quote
Old 09-23-2009, 02:20 AM   #12
Thinks s/he gets paid by the post
 
Join Date: Jan 2006
Posts: 2,928
My understanding is that qualified corporate plans under ERISA (like 401Ks) have very strong creditor protection. IRAs, under federal law, have protection but I believe you have to file successfully for bankruptcy to get that protection (unlike the 401K). States may provide varying levels of protection for IRAs but in CA, that protection is not particularly strong.
__________________
kaneohe is offline   Reply With Quote
Old 09-23-2009, 09:20 AM   #13
Moderator
ziggy29's Avatar
 
Join Date: Oct 2005
Location: Texas
Posts: 15,612
Quote:
Originally Posted by kaneohe View Post
Suggesting that another reason to stay in 401K is bettter protection against creditors .
In some states. Here in Texas, an IRA has unlimited asset protection from creditors and lawsuits just like a 401K plan. As do annuities and the cash value of insurance contracts.

We may have chiggers and scorpions and fire ants, but we also have the strongest asset protection laws in the country (along with Oklahoma and Florida).
__________________
"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)

RIP to Reemy, my avatar dog (2003 - 9/16/2017)
ziggy29 is offline   Reply With Quote
Old 09-23-2009, 09:21 AM   #14
Moderator Emeritus
Martha's Avatar
 
Join Date: Feb 2004
Location: minnesota
Posts: 13,212
That is correct kaneohe. IIf you don't file bankruptcy then protection of IRAs is a matter of state law. Some states have dollar limits on what is protected, others have limits like "amounts reasonably necessary for support." Others have no limits at all.

See my signature.
__________________
.


No more lawyer stuff, no more political stuff, so no more CYA

Martha is offline   Reply With Quote
Old 09-23-2009, 01:28 PM   #15
Recycles dryer sheets
figner's Avatar
 
Join Date: Jan 2007
Location: Los Angeles area
Posts: 329
If you want to have the money in a 401k, why not just leave it there and open an IRA separately while your wife is not employed by that company? Check with your 401k provider, but many will let you leave the money there after you leave the company, sometimes subject to some minimum balance. Once your wife is re-employed at the company, see if you can add the IRA money into the 401k. But at least then you don't have to worry about comingling funds and moving the majority (I assume) of the assets twice.

As LOL and kaneohe said, assuming your contributions and investment strategy within both accounts stay constant, it will make no difference to your total account value whether you keep it it one place (401k) or two (401k + IRA).
__________________

__________________
figner is offline   Reply With Quote
Reply

Tags
401k, ira, retirement


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
401(k) Rollover to IRA in down market? ProspectiveBum FIRE and Money 4 06-28-2008 11:53 PM
IRA to 401-K conversion stephenandrew FIRE and Money 7 03-31-2008 06:47 PM
IRA / 401(k) Withdrawal as Down Payment on Home BigMoneyJim Young Dreamers 11 02-14-2007 09:53 PM
How to retire early with all $ in IRA/401(k)? lwbarry FIRE and Money 7 11-06-2003 10:12 AM

 

 
All times are GMT -6. The time now is 12:42 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.