IRA Rollover

Posts Tagged ‘retirement’

Question: cashout 401k or rollover to where?

I was recently laid off but already got another job, anyway I have a few questions I’m not clear about.

I heard if you get laid off there is some way to cashout your 401k without penalty? is this true?

are all rollover IRAs the same? how do they compare to, say a traditional IRAs? same thing?

Whats the best place to open a rollover IRA, if I want to buy mutual funds and stocks, and also have a decent interest rate for cash just sitting there?

please provide as much information as you can. Thanks.

Answer: No, you cannot cash out your 401 (k) without penalty. Even if you’re at a qualified age, you’re still going to pay federal income tax.

You can open a Rollover IRA with a brokerage such as Charles Schwab, Fidelity, T. Rowe Price, or Vanguard.

Once you open a Rollover IRA, you will have the option of putting into a Traditional or Roth IRA (preferably Roth.) However, you will have to pay income tax up front with a Roth IRA contribution, but earnings grow tax free, qualified withdrawals begin at age 59 1/12 pending you’ve owned it 5 taxable years, and you can borrow against the principle at any time without penalty.

With a traditional IRA, you won’t pay income tax until you take a distribution at or after age 59 1/2.

One more thing: let your 401 (k) administrator or former employer roll it over into whatever company you tell them. If you take it yourself, you will have only 60 days to roll it over without paying income tax, so it would be easier if they would do it.

Can MY SD IRA/401K Take Out a Mortgage on a Rental Property?