always_learning
Recycles dryer sheets
- Joined
- Feb 2, 2017
- Messages
- 267
When one empties a 401k and rolls everything over to IRAs, what actually happens?
Are the funds simply transferred to similar funds? Do we have to choose funds for everything or is it all simply sold off and plunked into a type of settlement account and we choose things from scratch?
Are there any benefits/concerns about rebalancing the 401k before starting this process? We aren't sure exactly when we will do this, and have thought about moving some things around as part of usual rebalancing but will hold off if there might be issues afterward, either with taxes or otherwise.
The 401k has a crazy mix of before-tax and after tax monies from various sources (previous employer, employee contributions, after-tax contributions, employer match, etc). Once transferred, are things automatically combined into one Trad IRA and one Roth IRA?
DH (it's his 401k) has a Roth IRA at a different brokerage than the one who will be getting the 401k rollover. He does not have one at the brokerage where we will be rolling the monies to. I know a Roth IRA would have to be opened there to accept those funds, but does the fact that he has a Roth IRA elsewhere mean that we don't have to worry about the 5-year rule for new accounts?
The 401k also has company stock that we want to be careful with and take advantage of the NUA. How do we make sure this is done correctly?
Sorry for all of the questions. I've been looking and looking and can't seem to find what I'm looking for, either here or elsewhere.
Are the funds simply transferred to similar funds? Do we have to choose funds for everything or is it all simply sold off and plunked into a type of settlement account and we choose things from scratch?
Are there any benefits/concerns about rebalancing the 401k before starting this process? We aren't sure exactly when we will do this, and have thought about moving some things around as part of usual rebalancing but will hold off if there might be issues afterward, either with taxes or otherwise.
The 401k has a crazy mix of before-tax and after tax monies from various sources (previous employer, employee contributions, after-tax contributions, employer match, etc). Once transferred, are things automatically combined into one Trad IRA and one Roth IRA?
DH (it's his 401k) has a Roth IRA at a different brokerage than the one who will be getting the 401k rollover. He does not have one at the brokerage where we will be rolling the monies to. I know a Roth IRA would have to be opened there to accept those funds, but does the fact that he has a Roth IRA elsewhere mean that we don't have to worry about the 5-year rule for new accounts?
The 401k also has company stock that we want to be careful with and take advantage of the NUA. How do we make sure this is done correctly?
Sorry for all of the questions. I've been looking and looking and can't seem to find what I'm looking for, either here or elsewhere.