ira transfer

[frank]

I have a small 401 account at a local bank from a match where I used to work. I would like to transfer it to a 401 that I have with vanguard. can you do this without tax consequences and how would you do it? thanks

[Spock]

You mention two 401Ks. Where is the IRA involved?
401k transfers depend on the 401k plan documents.
Most 401Ks will not accept incoming transfers if you are not currently an active employee of the company sponsoring the plan.

ETA: Again depending on the plan documents, the IRA going into the 401K usually needs to be a Rollover IRA.

[Bir48die]

I think this is easy to explain. The thread title says IRA but I think OP means 401K. Plus he said a previous employer, not current.

Answer is yes, it is very simple. Two different ways. The first is better. You can fill out forms for a direct transfer. Easy enough. Just call customer service of where you want to transfer and explain. Some will do the paperwork for you.

Second plan is to have the check cut directly to you. You can then once the check clears either transfer it into your existing IRA or open a new one. There is a chance that the IRS will send you a note that they show as income but just keep all your information on account and deposit information and they back off.

I've done them both ways.

[jazz4cash]

I assume the account at the bank is an IRA Rollover from a previous employer's 401k plan. If you are active with a current employer 401k plan you may be able to roll the funds into the current 401k but it depends on the rules of the current plan as Spock explained.

It seems like you really want the funds consolidated at Vanguard in either the current 401k or a Vanguard IRA. You should call Vanguard and have them explain your options. There should be no tax consequences.

[CRLLS]

No tax consequences if you follow the rules mentioned.

I wonder what the benefit of rolling over into a new employer's 401K has over rolling it over to an IRA? Other than some protection against creditors (which are provided for IRA's in many states), or possible future loans (which I would never suggest). I don't know of any.

But a 401 account at a bank? Maybe you mean an IRA rollover account funded from a previous 401?

[Senator]

When you roll it over, do not take possession of the check. Do not have it issued in your personal name.

Do it electronically, and directly into the IRA or 401K account.

You are better off in a rollover IRA than a 401K with limited choices.

[Senator]

Quote:

Originally Posted by CRLLS No tax consequences if you follow the rules mentioned. I wonder what the benefit of rolling over into a new employer's 401K has over rolling it over to an IRA? Other than some protection against creditors (which are provided for IRA's in many states), or possible future loans (which I would never suggest). I don't know of any. But a 401 account at a bank? Maybe you mean an IRA rollover account funded from a previous 401?

100% correct.

Most people have limited risk with being sued. Most don't even have enough to bother with. Some small company 401ks only need one signature for a CEO to abscond with all the funds to Taihiti. That is a larger risk.

Perhaps a age 55 withdrawal age vs. Age 59.5? If that is your reason, you probably don't have enough to retire.

I would never want to risk money in a 401k that I could have in an IRA.

[frank]

I started working for a company part time for a while and didn't know that they signed me up for the ira. after finding out a couple of months later I wanted to stop the withdrawal from my paycheck, and didn't want the ira. they told me to leave it or there would be a 75. charge to close the account. the company was doing a 3 percent match so I left it there until I no longer worked for them. now the ira is about 2k and I just want to move it from the company ira to vanguard. I suppose another option would be just to leave it where it is until I need the money. or until my tax situation is a little better. I am 73 and have to take a mandatory withdrawal from my previous ira. I will check with the bank that handles the ira and find out if I can do an automatic transfer to my account at vanguard.

[CRLLS]

Quote:

Originally Posted by Senator 100% correct. Most people have limited risk with being sued. Most don't even have enough to bother with. Some small company 401ks only need one signature for a CEO to abscond with all the funds to Taihiti. That is a larger risk. Perhaps a age 55 withdrawal age vs. Age 59.5? If that is your reason, you probably don't have enough to retire. I would never want to risk money in a 401k that I could have in an IRA.

I had always treated my IRA (and 401K's for that matter) similar to a pension or SS. I would never be able to make a partial withdrawal from a pension or SS, so I considered my IRA in the same light. Money in the account was never to be touched until retirement. In the very small possibility that the SHTF, I could always withdraw from the IRA with 10% penalty (plus pay taxes of course) The very low likelihood of ever needing to do that was so low that I figured the 10% penalty would just be the cost of doing business. Fortunately, or possibly by good planning, I never had to do that.

[Spock]

Quote:

Originally Posted by CRLLS No tax consequences if you follow the rules mentioned. I wonder what the benefit of rolling over into a new employer's 401K has over rolling it over to an IRA? Other than some protection against creditors (which are provided for IRA's in many states), or possible future loans (which I would never suggest). I don't know of any. But a 401 account at a bank? Maybe you mean an IRA rollover account funded from a previous 401?

Some 401Ks offer a stable value fund that is not available outside of 401Ks.
I've used the 401K loan feature 3x... each time when either transitioning to a new job or "involuntary transition to early retirement" when having some extra cash at hand felt really good. Used the cash buffer to pay off a higher interest rate mortgage after the mortgage interest dropped below the IRS standard deduction/itemized deduction threshold. A 401k loan is also the ultimate conservative investment if you don't like the other options available.