Some of our New Direction IRA clients do not know that #401(k) plans from
former employers can be rolled directly into a self-directed IRA. If you currently have an IRA with us and
funds are still in a former employer’s 401(k) plan, these funds can be rolled
into your account and self-directed. The
good thing about rolling these funds directly into an IRA, this is technically called a 401k #roll over is that you will not
be subject to the 20% #withholding which occurs when taking the funds as a distribution would
cause.
In addition to 401(k) plans, #457 and #403(b) plans may also
be rolled into a self-directed IRA.
Again, these plans must be from former employers in order to roll
them over. We frequently get the
question “can I take 401(k) funds from my current employer and
self-direct?” The answer to this is
nearly always no. Under some rare
circumstances these plans may provide “in service” distributions or you may be
the trustee of the plan yourself and have the ability to change the plan, but
this is rare.
Does your spouse have an old 401(k) plan? Consider a self-directed account for your
spouse to roll the these funds into and consider the partnering yours and your
spouse’s IRA funds in a larger investment.
Take advantage of the investment power and economy of scale available in
a larger investment.
Self-direction of your retirement plan provides flexibility
and nearly endless choices of investments.
Maximizing your IRA through consolidation of old 401(k) plans, making
your annual contributions and being vigilant regarding innovative investments
will make your retirement years comfortable and fun if you have the money
available.
