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?
Many employers prefer you rollover your balance once you retire (since it costs them money to have that account still open); but if your balance is over $10,000 many can't force you to rollover your account.
Additionally, many providers/platforms also provide additional income option (Lifetime Income, Monthly Distributions, etc...) for those who are retired so you'll want to check with your provider on your options.
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 your retirement! There are three parties to consider with this question: the IRS, your former employer and you.
The IRS does not require that you rollover your 401(k). But, IRS does require that your Required Minimum Distribution be satisified prior to rolling the funds over if you decide to do so.
Your former employer may allow you to keep the 401(k) indefinitely or to roll it over in a certain time frame. It is more commont that you are allowed to maintain the account, but you should check with the Human Resources Dept or the current custoidan. The employers guidance will not be dependent on your age more how long it has been since you were employed.
Finally and most importatnly, there is your preferences. Are you happy with the plan, the choices, and the costs? Do you prefer a self-directed IRA that can allow for more investment options? Would you prefer to work with a professional?
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.