My wife used to work for a company that offered a 401k. She left that company in 2013 and the money has been just sitting there since then. The way we understand it, there is a 1 year period to roll-over a 401k to an IRA or something else, otherwise you just have to withdrawal the amount (approx $15k), pay taxes on that, and then reinvest the $$ in whatever account after that. Does that sound accurate?
That is not accurate. You are able to rollover or withdraw your 401(k) balance at any time after you terminate from the company. You will have to call the old company to request a rollover, and call you bank where you have the IRA to make sure you’re following their process to properly get the money transferred.
One additional thing is, if you contributed after-tax or roth into your 401(k), you can request for that balance to be rollover into a Roth IRA to avoid paying additional taxes on it. The balance that is made up of pre-tax contributions and employer match can be rollover to traditional IRA.
1 Like