Anyone ever convert their 401k to an IRA?

[crazy charlie]

I have a 401k with and employer that I no longer work for,Im retired last year. Its with Vanguard in very conservative slight moneymaker and designed to never lose any at all.401k rep said I could leave it there or a better idea would be to transfer to IRA with my credit union which pays a decent 5% rate right now.It would make more money and save in fees.Waiting to hear back from credit union as to if this is a good idea.Any downsides to this? Sounds like a no-brainer but in my experiences there are very few no-brainers that dont have an unknown downside.Curious if anyone has done this ?? Charlie

 

[tphoyt]

Keep us posted. I’m thinking of doing the same thing but I’m also not sure if I should leave things as they are and play it safe.
Beat

 

[dingbat]

If your 401K are per-tax contributions, you will owe the tax on the transfer amount.

 

[crazy charlie]

Keep us posted. I’m thinking of doing the same thing but I’m also not sure if I should leave things as they are and play it safe.
Beat

Waiting for a few call backs from qualified professionals.Im sure the 401K Vanguard rep would rather I keep it with him so he could earn some fees however being he gave me the idea, its got to worth looking into.Charlie

 

[crazy charlie]

Keep us posted. I’m thinking of doing the same thing but I’m also not sure if I should leave things as they are and play it safe.
Beat

I ha e had it confirmed by Vanguard rep and a banker Ira specialist.It is a good route to take.Must be careful about the transaction on both ends to avoid any tax implications. Ira should be opened first step.All bank and Ira info goes to 401k for a transfer.Double check all bank addresses and account numbers.You fill out forms and give to 401k and they do the transfer.IRS is completely out of the circle this way and no tax implications at all.The other way to do this is to withdraw from 401k a check that you take to bank for Ira within 60 days.Proper forms must be included showing the withdrawal and then the transfer or deposit.Forms must be completed perfectly and a copy held for income tax preparer.I am going with option 1 as there are too many chances of something going wrong with option 2 and option 2 signals IRS of the withdrawal. Soo I'm doing it!!! Charlie

 

[crazy charlie]

If your 401K are per-tax contributions, you will owe the tax on the transfer amount.

The 1st line of your statement is correct.The 2nd line is completely incorrect. Charlie

 

[tphoyt]

Thanks for info Charlie
Tim

 

[dingbat]

The 1st line of your statement is correct.The 2nd line is completely incorrect. Charlie

My bad.......have Roth IRA on my brain after meeting with our accountant last week.

 

[tpenfield]

Rollover . . . rollover. . . so they all rolled over and one fell out. (sorry for the singing . . . )

I believe you are asking about a 'Rollover' . . . I have rolled-over my 401K's from former employers into an IRA several times. Also converted some after-tax money into a Roth IRA. (not sure you can do that with a Roth any more)

Just create and IRA account and do some paperwork.

 

[redneck joe]

401k is mostly protected from lawsuits and bankrupcies, iras are not

 

[FLATHEAD]

If your 401K are per-tax contributions, you will owe the tax on the transfer amount.

Not necessarily.