rollover your (401)k plan

How to Rollover Your 401(k) Plan

So you’ve decided to switch companies, but you don’t know the first thing about finance or how to rollover your 401(k) plan. Now what? As the rules apply, a 401(k) simply cannot be placed in a U-Haul and driven from company to company. We all wish it were that easy, but we live in an era where financial planning, reasoning, and implementation takes some professional help or even hand-holding.

Which begs the question, “Do you have the right guidance on your side who ensures every penny earned does not slip through the cracks?” Perhaps you do, perhaps you don’t (yet), but that does not mean self-education has gone out the window. Here, we will be reminding you of the steps you should take when planning a 401(k) migration. 

Rollover your 401(k) Plan Step One: Paperwork 

You cannot move forward with your rollover without requesting a distribution form from your employer. Once the aforementioned form has been completed, you shall then await funds payable to you. These you are able to place in your new account. Another option that may happen is the funds could immediately be made payable to the custodian of your retirement account.

Step Two: Say “I Do.”  

It’s time to make an exciting decision! Options are awesome, but having too many can make a move difficult or confusing. Typically, you have the choice of either moving your assets into a Roth IRA account or a Traditional IRA account

So what are the main differences between the two accounts? 

Roth IRA

  • Funded by post-taxed earnings
  • May contribute at any age up to $6,000 per year, an an additional $1,000 if aged 50 or above
  • Can withdraw from contributions at any time, at any age
  • Can withdraw from earnings at the age of 59.5
  • No required minimum distribution (RMD)
  • Income limit must be under $137,000/year if filing single, or 203,000 if filing jointly

Traditional IRA

  • Funded by pre-taxed earnings
  • Can contribute if under the age of 70.5 up to $6,000 per year. And an additional $1,000 if aged 50 or above
  • Can withdraw without penalties at the age of 59.5
  • Required minimum distribution (RMD) begin at 70.5
  • No maximum income limit

While these two seemingly different accounts do nearly the same thing and intend to meet the same goals, they both have their pros and cons in terms of requirements, tax deductions, fees, income limits and withdrawal requirements. This is why you must say, “I do,” to the most eligible suitor that will ultimately work for you. 

Step Three: Open the Account 

Once you have chosen between a Roth IRA or Traditional IRA, it is time to sign on the dotted line. This process should be smooth sailing as long as the necessary information has been properly compiled. If you run into complications in any part of the process, hiring a well versed money manager and financial advisor can be one of the most beneficial choices an investor (you) can make.

Rollover your 401(k) Plan Step Four: Investing your Assets

With great funds comes great responsibility, and putting your funds to work as soon as possible can give your account more assets to compound over time. This is where we, Howard Capital Management, Inc. (HCM), can step in and help. Once the funds are placed in your IRA account, HCM can then venture forward to invest those funds in a portfolio of your choice.

Entrusting Howard Capital Management, Inc. as Your Money Manager

When you rollover your 401(k) plan, sometimes there are complications. Hiring a well versed money manager and financial advisor can be one of the most beneficial choices an investor (you) can make. Entrusting your money and your time with any money manager and advisor should elate and excite you for your future. What we believe delineates Howard Capital Management, Inc.’s services is our knowledge, experience, and technology used to invest your funds to your benefit.

When you are planning on switching companies, it is important to be as prepared as possible, and by following these basic steps you can take much of the pressure off. In terms of your future, you should always be armed with a support system you can rely on. For additional questions, do not hesitate to contact a representative at the 401(k) Optimizer®. It is our mission to act as a backbone for your future, your investments, and your 401(k). 


Start Optimizing your 401(k) today.