The 401k Direct Rollover Process

A 401k direct rollover is the fastest and easiest way to move your funds into another retirement account. Here are the basics of the 401k direct rollover process.

Open an Account

The first step of the process is to open a new retirement account. You could open another 401k with a new employer or move the funds into an IRA. You should be able to open an IRA with any number of financial brokers in the market. You will have to fill out some paperwork that is required of new accounts. You will also need to notify them that you will be transferring funds from an existing retirement account into the account. They will most likely ask you to fill out a special form for the rollover process as well.

Contact 401k Provider

Once you have somewhere to transfer the funds, you will need to contact your 401k provider and tell them your intentions to transfer the money. They will ask you to fill out a rollover request form. You will need to provide them with the information to contact your new broker. At that point, your old 401k provider and your new retirement account broker will transfer the money directly between themselves without involving you.



Direct Rollover



A direct rollover is a transaction that involves moving funds from one 401k account directly over to another 401k account. When this process is completed, an individual will not have to pay any early distribution penalties, as he or she would in cashing out the account first. This process is generally very simple, as you will only have to fill out paperwork to open a new retirement account and then fill out another form to initiate the transfer. A direct rollover is generally initiated when an individual leaves one employer and starts working for another employer with a 401k. 

blog comments powered by Disqus