401(k) Rollover: What You Need to Know

If you're looking for greater flexibility and control over your retirement plan, an IRA rollover may be the right choice for you. An IRA rollover gives you the opportunity to consolidate your old 401(k)s and other workplace retirement accounts you accumulated over the course of your career. As a result, you can more effectively save for retirement and have greater control over all of your investments.

We offer a wide selection of services to help you achieve financial freedom. If you're considering the possibility of a 401(k) rollover to an individual IRA, we can work with you to ensure that you stay on track in terms of your financial goals. Whether you have questions about 401(k) rollover to IRA rules or how you can benefit from a rollover, we have all the answers you need.

Should I roll over my 401(k)?

A 401(k) rollover to an IRA offers a slew of benefits. With an IRA, you have a much wider range of investment options than you do with a 401(k). Most 401(k)s are limited to only a few mutual funds, while individual IRAs grant you the ability to choose between (but not limited to) various stocks, bonds, exchange-traded funds (ETFs) and mutual funds.

Opting for an IRA rollover also boosts your chances of saving more money in the long run. There are a number of hidden fees attached to a 401(k), such as administrative fees, investment fees and fund expense ratios. While your IRA won't be entirely free of fees, you can enjoy greater flexibility over how and where you invest. This allows you to save a considerable amount of money over time.

Schedule Consultation

Why is my 401(k) rollover counted as income?

When doing your taxes, you may notice that your rollover 401(k) to IRA appears on your income summary. This is because the rollover technically qualifies as income. However, it's important to note that a 401(k) rollover to IRA is not considered taxable income. As a result, the income numbers listed on your Adjustable Gross Income (AGI) tax return and taxable income will not be impacted by your 401(k) rollover.

What is the 401(k) to IRA rollover limit?

As you familiarize yourself with the 401(k) rollover to IRA rules, you may be wondering what the rollover limit is. Fortunately, the contribution limits for most IRAs do not apply to 401(k) rollover contributions. This means that you are free to roll over the full amount in your 401(k) to your individual IRA, whether it's $20,000, $200,000 or $2,000,000. However, keep in mind that you may be subject to contribution limits once you've completed the initial rollover.

To learn more about IRA rollovers, contact us today. Our financial experts help you prepare for retirement so that you can retire with confidence and peace of mind.

How Much Do You Know About Investing?

These days, investing in financial markets is a common practice. Yet, many Americans remain under-informed about how various investment products really work. Want to know how you rank? Challenge yourself with our brief quiz, "Test Your Investing IQ."