There a many different choices when you determine to transfer your funds out of an existing 401k retirement account. Deciding where to transfer your funds to, wading through all of the rules regarding the transfer, and meeting all of the stringent deadlines is often enough to stress anyone out.
Though the decision of where to transfer your funds in not simple to make, it is critical that explore your various options available to you. The first thing that you will want to do is consult with your tax advisor and/or financial planner.
Your financial consultant or tax advisor will be able to tell you whether to transfer your funds into another 401k, IRA account, or other investment vehicle. As a professional they will be updated on the latest tax news and regulations.
The IRS has ensured that 401k rollovers are difficult for the investor, creating rules and regulations that are seemingly designed to trap the taxpayer. One of these types of rules is the 401k's 60 day rule.
The 60 day rule is in reference to the allocated time available to transfer the funds out of your existing account into your new retirement account. Once you have determined to transfer your 401k, they expect you to take care of the transaction. You should be prepared to make the decision and take action on the account.
Regardless of how trivial this rule is, the IRS is rather stringent on the execution of it. Most good financial planners will instruct their clients to prepare for the transfer by making their decisions beforehand. This allows you sufficient time to make all of the fund movements, and ensures that you don't miss the deadline.
The IRS has been notoriously strict on this 60 day rule. There are cases in which transfers on the 61st day have been rejected by the IRS. There are very few circumstances in which the IRS is lenient on this stipulation.
The only scenario in which the Internal Revenue Service is willing to consider a late transfer is in the case of unusual personal circumstances. These include death, disability, hospitalization, and incarceration. This compassion ruling is not really a good substitute for getting your transfer done in time, and is often associated with a fine for the waiver. The fine is wholly dependent upon the size of the transfer between accounts. - 32535
Though the decision of where to transfer your funds in not simple to make, it is critical that explore your various options available to you. The first thing that you will want to do is consult with your tax advisor and/or financial planner.
Your financial consultant or tax advisor will be able to tell you whether to transfer your funds into another 401k, IRA account, or other investment vehicle. As a professional they will be updated on the latest tax news and regulations.
The IRS has ensured that 401k rollovers are difficult for the investor, creating rules and regulations that are seemingly designed to trap the taxpayer. One of these types of rules is the 401k's 60 day rule.
The 60 day rule is in reference to the allocated time available to transfer the funds out of your existing account into your new retirement account. Once you have determined to transfer your 401k, they expect you to take care of the transaction. You should be prepared to make the decision and take action on the account.
Regardless of how trivial this rule is, the IRS is rather stringent on the execution of it. Most good financial planners will instruct their clients to prepare for the transfer by making their decisions beforehand. This allows you sufficient time to make all of the fund movements, and ensures that you don't miss the deadline.
The IRS has been notoriously strict on this 60 day rule. There are cases in which transfers on the 61st day have been rejected by the IRS. There are very few circumstances in which the IRS is lenient on this stipulation.
The only scenario in which the Internal Revenue Service is willing to consider a late transfer is in the case of unusual personal circumstances. These include death, disability, hospitalization, and incarceration. This compassion ruling is not really a good substitute for getting your transfer done in time, and is often associated with a fine for the waiver. The fine is wholly dependent upon the size of the transfer between accounts. - 32535
About the Author:
Roger Harrison is an experienced financial planning enthusiast that has extensively studied how to do a 401k rollover to ira and the best ways to transfer your money. Visit him online at the The 401k Rollover Guru for more information on these and other related topics.
