Simplicity is sometimes best when investing for retirement. Having your retirement savings in one account can make it easier to keep track of your investment performance reports. Plus, if you need to reallocate, you have just one account to change and one set of investment expenses to pay. So you may prefer to
roll over
your
401(k)
assets into your new employer's plan.
However, the law doesn't require employers to accept rollovers into their 401(k), 403(b), or 457 plans. It's up to the employer to decide. Even if the plan does accept rollovers, you might have to wait to qualify for participation, possibly as long as a year. If you're looking for a new job, it's a good idea to ask about the company's rollover policy.
If your new employer's plan does accept rollovers, it's smart to investigate the details thoroughly before committing to a move. In particular, make sure that the plan has a satisfactory range of investment choices. You'll want to look for strong performance records and consider whether the range of choices would allow you to assemble a portfolio suited to your investment style. Also, ask about the fees for the new plan. If they're higher than you've been paying, you may want to consider moving your retirement assets into an IRA or leaving them where they are.
1. Talk to the 401(k)
plan administrator at your new job and find out what
arrangements are necessary. For example, you may need
to choose an
asset
allocation
for the amount you are rolling over.
2. Complete the required
distribution forms from your former employer's plan
administrator.
3. Request that a check
be sent directly to the new plan's administrator or
transferred electronically, if possible.
If you want to prevent administrative mishaps from delaying your rollover, you can handle the transfer of funds yourself. Just ask the administrator of your former employer's plan to make the check out to the new plan administrator but give that check to you. If you turn the check over to the new plan within 60 days, it's still a direct rollover and there are no extra taxes owed on the transaction.
