Comments on: Attention Generation Y, Don’t Forget to Rollover Your 401k! http://moneysmartlife.com/attention-generation-y-don%e2%80%99t-forget-to-rollover-your-401k/ Money Tips for a Better Life Sat, 20 Mar 2010 00:29:02 -0400 http://wordpress.org/?v=2.8.4 hourly 1 By: Casey http://moneysmartlife.com/attention-generation-y-don%e2%80%99t-forget-to-rollover-your-401k/comment-page-1/#comment-146511 Casey Wed, 15 Apr 2009 17:27:48 +0000 http://www.moneysmartlife.com/2007/01/11/attention-generation-y-don%e2%80%99t-forget-to-rollover-your-401k/#comment-146511 Thanks for clarifying this. I would like to think that I'm involved enough in my own future to be able to run my own IRA, but i don't think I'm quite there yet... so 2.5 years after starting my current job, I'm going to transfer over my other 401k. Thanks for clarifying this. I would like to think that I’m involved enough in my own future to be able to run my own IRA, but i don’t think I’m quite there yet… so 2.5 years after starting my current job, I’m going to transfer over my other 401k.

]]> By: Carnival of Investing on Martin Luther King Day http://moneysmartlife.com/attention-generation-y-don%e2%80%99t-forget-to-rollover-your-401k/comment-page-1/#comment-117638 Carnival of Investing on Martin Luther King Day Sun, 02 Nov 2008 01:55:35 +0000 http://www.moneysmartlife.com/2007/01/11/attention-generation-y-don%e2%80%99t-forget-to-rollover-your-401k/#comment-117638 [...] those money is to leave where they were, then you are wrong. Ben at Money Smart Life will tell you there are other alternatives. But whatever you do, you have to follow the [...] [...] those money is to leave where they were, then you are wrong. Ben at Money Smart Life will tell you there are other alternatives. But whatever you do, you have to follow the [...]

]]> By: Abdul Sumar http://moneysmartlife.com/attention-generation-y-don%e2%80%99t-forget-to-rollover-your-401k/comment-page-1/#comment-87059 Abdul Sumar Sun, 06 Jul 2008 02:52:15 +0000 http://www.moneysmartlife.com/2007/01/11/attention-generation-y-don%e2%80%99t-forget-to-rollover-your-401k/#comment-87059 That is so true indeed, cashing out your 401k when switching jobs is the most stupid mistake one can commit, first you'll be hit with a 10% penalty + you will owe taxes on the distributed amount. The best thing to do is to rollover to a Roth IRA. This is how a cash out transaction works if you leave your current job. "When you leave your current employer, they will send you a check for your fully vested 401k retirement savings that you have accumulated. This is treated as a cash out transaction and your employer will be required to withhold a 20% tax amount, leaving you with only 80% of your cash. This is NOT what you want to do! Furthermore, you will be required to pay a 10% early withdrawal penalty if you are under the age of 55 and withdraw your 401k retirement savings as cash. Source: http://www.401klookup.com/rollovers-401k.html To avoid this cash out transaction, you must arrange for a Direct 401k rollover. Also known as a trustee to trustee 401k rollover, this rollover will instruct your old employer to make out a check in the name of your new 401k plan manager or "custodian" as they call it. This way, you will not be getting any cash. Your 401k funds will be sent to your new 401k custodian. Ask your new 401k custodian exactly how they want to receive this payment. Usually it will be like "Investment Banking Corporation, for the benefit of Peter James..." That is so true indeed, cashing out your 401k when switching jobs is the most stupid mistake one can commit, first you’ll be hit with a 10% penalty + you will owe taxes on the distributed amount. The best thing to do is to rollover to a Roth IRA. This is how a cash out transaction works if you leave your current job.

“When you leave your current employer, they will send you a check for your fully vested 401k retirement savings that you have accumulated. This is treated as a cash out transaction and your employer will be required to withhold a 20% tax amount, leaving you with only 80% of your cash. This is NOT what you want to do! Furthermore, you will be required to pay a 10% early withdrawal penalty if you are under the age of 55 and withdraw your 401k retirement savings as cash.
Source: http://www.401klookup.com/rollovers-401k.html

To avoid this cash out transaction, you must arrange for a Direct 401k rollover. Also known as a trustee to trustee 401k rollover, this rollover will instruct your old employer to make out a check in the name of your new 401k plan manager or “custodian” as they call it. This way, you will not be getting any cash. Your 401k funds will be sent to your new 401k custodian. Ask your new 401k custodian exactly how they want to receive this payment. Usually it will be like “Investment Banking Corporation, for the benefit of Peter James…”

]]> By: FIRE Finance http://moneysmartlife.com/attention-generation-y-don%e2%80%99t-forget-to-rollover-your-401k/comment-page-1/#comment-480 FIRE Finance Mon, 22 Jan 2007 09:13:00 +0000 http://www.moneysmartlife.com/2007/01/11/attention-generation-y-don%e2%80%99t-forget-to-rollover-your-401k/#comment-480 <strong>Jan - Week #3 - Round Up Of Carnivals And Festivals!...</strong> Here comes Sunday and with it comes an afternoon of leisure which we spend fruitfully going through the carnivals and festivals of the personal finance blogosphere. A wealth of information is shared every week at these carnivals. Consequently they broa... Jan – Week #3 – Round Up Of Carnivals And Festivals!…

Here comes Sunday and with it comes an afternoon of leisure which we spend fruitfully going through the carnivals and festivals of the personal finance blogosphere. A wealth of information is shared every week at these carnivals. Consequently they broa…

]]> By: Money Smart Life » Job Security, 401k to IRA, Credit Card Mistakes, & Restaraunt Bills - Carnival Roundup http://moneysmartlife.com/attention-generation-y-don%e2%80%99t-forget-to-rollover-your-401k/comment-page-1/#comment-468 Money Smart Life » Job Security, 401k to IRA, Credit Card Mistakes, & Restaraunt Bills - Carnival Roundup Sat, 20 Jan 2007 18:55:12 +0000 http://www.moneysmartlife.com/2007/01/11/attention-generation-y-don%e2%80%99t-forget-to-rollover-your-401k/#comment-468 [...] When people get fed up with their job and move on to greener pastures they should remember to roll their 401k over into an IRA. I discussed the benefits of rolling over into an IRA in the Carnival of Investing over at the Sun’s Financial Diary. [...] [...] When people get fed up with their job and move on to greener pastures they should remember to roll their 401k over into an IRA. I discussed the benefits of rolling over into an IRA in the Carnival of Investing over at the Sun’s Financial Diary. [...]

]]> By: Carnival of Investing on Martin Luther King Day - The Sun’s Financial Diary - Accumulating wealth is like building The Great Wall, one brick at a time http://moneysmartlife.com/attention-generation-y-don%e2%80%99t-forget-to-rollover-your-401k/comment-page-1/#comment-421 Carnival of Investing on Martin Luther King Day - The Sun’s Financial Diary - Accumulating wealth is like building The Great Wall, one brick at a time Mon, 15 Jan 2007 18:11:14 +0000 http://www.moneysmartlife.com/2007/01/11/attention-generation-y-don%e2%80%99t-forget-to-rollover-your-401k/#comment-421 [...] How many of you have left your old 401(k) account with your previous employer when you changed job? If you think the only way to deal with those money is to leave where they were, then you are wrong. Ben at Money Smart Life will tell you there are other alternatives. But whatever you do, you have to follow the rules. [...] [...] How many of you have left your old 401(k) account with your previous employer when you changed job? If you think the only way to deal with those money is to leave where they were, then you are wrong. Ben at Money Smart Life will tell you there are other alternatives. But whatever you do, you have to follow the rules. [...]

]]> By: The Carnival of Investing on Martin Luther King Day - The Sun’s Financial Diary - Accumulating wealth is like building The Great Wall, one brick at a time http://moneysmartlife.com/attention-generation-y-don%e2%80%99t-forget-to-rollover-your-401k/comment-page-1/#comment-419 The Carnival of Investing on Martin Luther King Day - The Sun’s Financial Diary - Accumulating wealth is like building The Great Wall, one brick at a time Mon, 15 Jan 2007 15:04:47 +0000 http://www.moneysmartlife.com/2007/01/11/attention-generation-y-don%e2%80%99t-forget-to-rollover-your-401k/#comment-419 [...] How many of you have left your old 401(k) account with your previous employer when you changed job? If you think the only way to deal with those money is to leave where they were, then you are wrong. Ben at Money Smart Life will tell you there are other alternatives. But whatever you do, you have to follow the rules. [...] [...] How many of you have left your old 401(k) account with your previous employer when you changed job? If you think the only way to deal with those money is to leave where they were, then you are wrong. Ben at Money Smart Life will tell you there are other alternatives. But whatever you do, you have to follow the rules. [...]

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