IRA Rollover

Archive for October, 2006

Question: 401k Rollover into IRA?

I am no where near retirement, but I have $105K in my old 401K I’d like to rollover into a self directed IRA. Now $5K of that $105 is considered “after tax”. So I should be able to rollover $100K into the IRA, and keep $5K for a shopping spree, without incurring any taxes or early widthdraw fees. Am I missing something? Only quality answers, please.

Answer: I am a tax accountant & do not think that you are able to withdraw $5K without incurring the 10% early withdrawal fee, unless you meet one of the exceptions to the early withdrawal fee, such as being separated from service (fired or otherwise let go) in a year in which you turned 55.

Check out IRS Publication 590.