Comments on: 401k rollovers and rollbacks

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By: pbucelwicz

pbucelwicz — Tue, 15 Jan 2008 19:28:46 +0000

You will want create a separate IRA for your rollover. Doing so you can easily move these funds to another employer sponsored plan in the future. Once you make contributions to a rollover that are not from a company sponsored plan, you lose the right to move this rollover to a company sponsored plan.

When you leave the company, I suggest you roll your 401k to a Rollover IRA, open a new Roth IRA and make new contributions to that.

By: jboynton

jboynton — Fri, 11 Jan 2008 14:36:01 +0000

You can roll your current 401k into an IRA Rollover once you leave the firm. You could continue to make monthly contributions to the IRA Rollover. You should consult a tax advisor to determine the tax deductibility of your contributions. Also, depending on how long you have been at the company, there may be a vesting schedule on the plan, so the company may not let you take the employer contributions. Generally speaking, IRA contributions are placed in the account before taxed, whereas Roth IRA’s are made after tax. The maximum contribution for 2008 into an IRA is $5,000.

We recommend that you contact a financial advisor should you decide to make this rollover. We have made a strategic alliance with an excellent firm in Boston that includes investment advisors, analysts and tax consultants. Their advice is free and they can show you how to best implement a rollover into several accounts, which can be diversified with your personal specifications. In order to contact this firm, you may contact our in-house liaison to this firm at jboynton@moneyanswertree.com. Good luck!

By: pbucelwicz

pbucelwicz — Fri, 11 Jan 2008 02:53:12 +0000

E*TRADE offers a rollover IRA account. You are allowed to roll over your existing 401k assets. You will continue your tax-deferred growth. This account also allows you to rollback into another company’s 401k plan.

More information on rollover IRAs

Etrade:
https://us.etrade.com/e/t/welcome/iraroll

Wachovia:
http://www.wachovia.com/personal/page/0,,4803_4805_4820_4877,00.html

Schwab:
http://www.schwab.com/public/schwab/home/account_types/ira_retirement/rollover?cmsid=P-991233&lvl1=home&lvl2=account_types

Common IRA Rollover Mistakes – http://www.investopedia.com/articles/retirement/06/rollovermistakes.asp

I have asked our in-house financial consultant to research this question further. He will be posting more information soon.