You’ve changed jobs and are adapting to your new situation at work. You have a lot on your mind, but one thing you must remember to do is to roll over your 401k. Many, if not most, forget to do this and their 401k sits in their account with their former employer. This is can be a good thing if it is a good retirement plan, but rolling over is probably the best and safest method.
Be proctive and get this done so you can invest that retirement money the way you want. Typically in 401ks you have limited choices for investments, but when you rollover to an online brokerage firm you have much more investment options.
Do not cash this money in because you will owe taxes and a 10% penalty on the funds you withdrawal and do not put into another type of retirement account.
Step 1:
Compare online brokerage firms’ fee structure, customer service, etc. to get a feel for the company. Not all firms are the same so check out the details before committing. Look at some websites that do comparisons like this at bankrate. If you already have an account with a firm then contact them to see if they can provide you a Rollover IRA account. If you have not liked their service then look into transferring that account to another firm since you are already in the process of moving money.
Step 2:
Open a Rollover IRA at an online brokerage firm. Either fill out the online application or have them mail one to you. Make sure to provide them with al the necessary paperwork and ask them what information they will need from your former employer.
Step 3:
Complete a Rollover IRA application for the firm you chose.
Step 4:
Contact your former employer to alert them that you will be rolling over your 401k. Then complete all required distribution forms. Get a date that they will rollover your 401k to your new account. Don’t forget to get a benefits contact name and phone number because you might need it. Get any other information your online broker needs to complete the transaction.
Step 5:
Invest your money when the account has been funded and use an investment plan that complements the rest of your retirement portfolio.