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?
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!
Congratulations on retirement first of all. When looking at your 401(k) there is no set time frame that you have in order to rollover your assets into an IRA as long as the balance exceeds $5000. One thing that you do need to pay attention to, however, is the required distributions. Not that you have retired and you have aged beyond 70 1/2 you will need to ensure that each year you are removing at least a minimum of your plan based on your age and the balance in the account the end of the previous year. Unless you were an owner or a key person you may have been able to get around this for the last several years but the IRS will be looking for those distributions now.
No, you may roll over to another qualifed plan, like an IRA with no issues. Now that you've retired, make sure your provider is taking out the Required Minimum Distributions for retirement assets. This is typical done automaticly, but you will want to make sure, because you are the one responsible.
There is no limit as far as tax rules, you can leave it in the 401k indefinitely, as long as you take out the annual Required Minimum Distribution. But some 401k plans have their own rules requiring employees who have separated from service to remove their money. Such rules are specific to the plan. If your plan has such a rule, you can rollover the 401k to an IRA to avoid a taxable distribution.