I am a fully vested employee with Utility Trailer Manufacturing. I want to do a direct rollover to a traditional IRA. I am planning a move to another career. I want to avoid getting taxed and take it with me without penalties. Will Utility Trailer do a direct rollover to an IRA? Thanks Justin
Once you leave your current employee you can contact your plan administrator and/or your HR department and discuss the proper method for rolling your 401(k) into an IRA. So long as the transfer is direct from your 401(k) to your IRA custodian and you don't take custody of the assets in between the transfer is non-taxable and there should be no penalties. Many advisors will help facilitate this type of transfer and can help walk you through this process and build a financial game plan for the IRA once the assets transfer.
Best of luck in your new career!
First of all, you have 3 main options once you leave your employer.
Option 1: Leave the money in the plan and do nothing, as long as your account balance is over their minimum (you will need to find out what that is, typically $1,000).
Option 2: Cash out and pay taxes and potentially early withdrawal penalty if under age 59.5 (something you probably won't want to do based on your question).
Option 3: Rollover to an IRA or new employer plan if eligible. You need to have a discussion around your future goals of the money to make sure you are making the right decision for yourself.
Sometimes the rollover to the IRA is not the right decision based on those stated goals. Please reach out to a trusted advisor in your community to get the help you are looking for.
I am happy to answer any questions if you send me your phone number and good time to contact.
Justin, it comes across as though you are talking about a current 401K that you have with your current company. If that is the case, yes, you would be able to roll that over to an IRA after you have left the company. I am not familiar with Utility Trailer Manufacturing, however, I haven't heard of any company not allowing you to roll out after your service has ended. This would be a fairly basic and common thing to do. Rollovers would keep you from taxes and penalties as well.
Congratulations on your transition! This process can be quick and painless if done correctly. Here's how:
Once you leave UTM you'll want to set up an IRA with a financial institution such as Charles Schwab, TD Ameritrade or any other financial institution you are comfortable with. This is pretty easy to do, should only take about 20 minutes. Several institutions will allow you to do this online. Make sure you set up both a primary and contingent beneficiary when creating the account.
Once this account is established you can initiate a trustee to trustee transfer. This means the money goes directly from the 401k plan to your IRA.
By transferring the funds directly from institutions you can avoid any tax impact or penalties. You'll need to choose new funds to invest in. I'd recommend looking for ETF based options because of their low fees. I'd also take some time to review new health benefits and retirement options in your new career.
Happy to answer any questions if you send me your phone number and good time to contact.
Justin, In order to be fully vested you must be a veteran there at Utility. The short easy anser is yes, if your money is in the 401K employer plan, then once you leave, you can directly roll your money in the 401K to YOUR IRA, either ROTH IRA, or a Traditional IRA. No hype intended, but find yourself a Financial Advisor that doesn't come across as some mutual fund and annuity sales person. There is so much a good advisor can help your with. I promise.