IRA Rollover

Archive for December, 2006

Question: Leave in previous employer’s 401k or rollover into IRA?

I have money in a previous empoyer’s 401K plan and I am getting good returns, but if I do decide to rollover to an IRA, what are the advantages and disadvantages of both when it comes to retiring and making withdrawals?
The expenses are acceptable and so are the returns (mutual funds). My biggest concern is the tax implications of early withdrawals if I decide to retire before 59.5. Are there advantages of one type of account over the other if I retire at 55? How can I find out if the 72(t) rule applies to my 401K?

Answer: Roll it over into your own IRA. First, if you use the open IRA market you have hundreds of thousands of funds to pick from your company probably has less than 50 funds to pick from. I have changed jobs 3 times and each time I call up my investment broker and roll it over into my account with him. Plus, I trust his advice (I hired him) more than my previous company’s “guy.” Do not withdraw it yourself, it will look like a withdraw instead of a rollover. Have a broker do it for you.

Advantages at retirement, you won’t have funds scattered all over the place. The average person changes jobs/careers 6 times.

John Park Free Offer