I recently retired at the age of 77; is there a time limit on rolling over my 401(k) from my former employer?

I recently retired at the age of 77. Is there a time limit on rolling over my 401(k) from my former employer?

Retirement, 401(k)
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October 2018

Congratulations! My hope is that you have a financial plan in place so that you have a roadmap to help guide you through retirement. If you don't have a financial plan in place, it's never to late to start one.

As far as moving 401k assets go, consider the following:

  • You do not have to move funds from the plan as long as you maintain an asset level that allows you to remain.
  • While there are some out there who do, 401k plans typically do not offer offer advice.
    • So if you need investment help, I suggest moving the funds into a Traditional IRA and working with and advisor.
    • You will also have access to significantly more investment options that will be more specific to your needs.
  • If you decide to move the money from the 401k to a Traditional IRA, consider a direct transfer instead of a rollover.
    • You can only have one rollover per calendar year without potentially adverse tax consequences.
    • There is no limit on the number of transfers you can make. So if you have plans at multiple employers, transfers are the way to go.
  • If you want to move part (or all) of your 401k into a Roth IRA, you must move the money to a Traditional IRA first, then you can move the funds to the Roth IRA (called a Roth Conversion)
    • The transfer of funds from the 401k to the Traditional IRA will generate IRS Form 1099R to notify the IRS of the transfer. You have to report the move but there are no taxes due.
    • The transfer of funds (or assets) from the Traditional IRA to the Roth IRA also generates a Form 1099R, but this one triggers the taxable event that will then determine the tax on the amount converted (the amount converted is taxed as ordinary income in the year of the conversion).

I hope this helps. Best of luck to you, and enjoy your retirement!

October 2018
October 2018
October 2018
October 2018