401k kwestion

[The Guru]

My wife (64) is a year or so from retirement. The agency she worked for has essentially been absorbed by the large medical center that previously contracted with them. Consequently, she has to move her 401k. we're wondering how to go about this without tax or other consequences; is it a fairly straighforward process? I'd like to move it to Vanguard (IRA??) Any guidance would be much appreciated! Thanks!

[Morning Glory]

Just call Vanguard,  they are really helpful! If you do a direct rollover to a traditional IRA there should be no tax.

[The Guru]

Thanks for responding! Just spoke with the wife- apparently they are issuing the proceeds by check (WT....?) Last I knew you could do one such "indirect" rollover from one IRA to another per year without consequences; let's hope it holds true for this as well.

[dandarc]

So you probably want to transfer traditional 401K -> traditional IRA and Roth 401K -> Roth IRA if you've got Roth funds - that's the clearest "no-tax-consequences immediatley" in general. Obviously your situation could be different if there's non-deductible traditional contributions in play other factors, but that's general.

And yeah - just call Vanguard they'll walk you through what they need.

[Morning Glory]

Thanks for responding! Just spoke with the wife- apparently they are issuing the proceeds by check (WT....?) Last I knew you could do one such "indirect" rollover from one IRA to another per year without consequences; let's hope it holds true for this as well.

That happened with my pension rollover last year. I think you have 60 or 90 days for it to get to Vanguard before there are tax consequences. I sent it by priority mail with tracking just to be sure, but I was worried the whole time until it landed. You would think they could just do it electronically.

[reeshau]

Thanks for responding! Just spoke with the wife- apparently they are issuing the proceeds by check (WT....?) Last I knew you could do one such "indirect" rollover from one IRA to another per year without consequences; let's hope it holds true for this as well.

If they issue a check to you, know that they will withhold taxes on it.  And you will need to make up the difference in your deposit, or that will be counted as a withdrawal.

Much better to get a direct rollover.  Choose an IRA provider, and they can help you with it.

[The Guru]

Thanks for the Roth> Roth- traditional>traditional tip; I hadn't thought to ask about that.

And fortunately she was mistaken- the transfer will be electronic.

[MoseyingAlong]

Thanks for responding! Just spoke with the wife- apparently they are issuing the proceeds by check (WT....?) Last I knew you could do one such "indirect" rollover from one IRA to another per year without consequences; let's hope it holds true for this as well.

If they issue a check to you, know that they will withhold taxes on it.  And you will need to make up the difference in your deposit, or that will be counted as a withdrawal.

Much better to get a direct rollover.  Choose an IRA provider, and they can help you with it.

Just to expand for future readers, this depends on what you mean by "a check to you."
If it is a distribution to you personally, i.e. the check is to your name, yes, they will most likely withhold taxes.
However, if it's a check to the new custodian but mailed to you, i.e. check is payable to your IRA at Vanguard but mailed to your home, that is a direct rollover and taxes will not be withheld.

[cool7hand]

Thanks for responding! Just spoke with the wife- apparently they are issuing the proceeds by check (WT....?) Last I knew you could do one such "indirect" rollover from one IRA to another per year without consequences; let's hope it holds true for this as well.

If they issue a check to you, know that they will withhold taxes on it.  And you will need to make up the difference in your deposit, or that will be counted as a withdrawal.

Much better to get a direct rollover.  Choose an IRA provider, and they can help you with it.

Just to expand for future readers, this depends on what you mean by "a check to you."
If it is a distribution to you personally, i.e. the check is to your name, yes, they will most likely withhold taxes.
However, if it's a check to the new custodian but mailed to you, i.e. check is payable to your IRA at Vanguard but mailed to your home, that is a direct rollover and taxes will not be withheld.

This was our experience as well.

[Morning Glory]

Thanks for responding! Just spoke with the wife- apparently they are issuing the proceeds by check (WT....?) Last I knew you could do one such "indirect" rollover from one IRA to another per year without consequences; let's hope it holds true for this as well.

If they issue a check to you, know that they will withhold taxes on it.  And you will need to make up the difference in your deposit, or that will be counted as a withdrawal.

Much better to get a direct rollover.  Choose an IRA provider, and they can help you with it.

Just to expand for future readers, this depends on what you mean by "a check to you."
If it is a distribution to you personally, i.e. the check is to your name, yes, they will most likely withhold taxes.
However, if it's a check to the new custodian but mailed to you, i.e. check is payable to your IRA at Vanguard but mailed to your home, that is a direct rollover and taxes will not be withheld.

This was our experience as well.

Mine was made out to vanguard but mailed to my house. I guess they can't mail it to vanguard because?????

[The Guru]

Apparently I was mistaken about being mistaken- we WILL receive a check payable to the new company exactly as you said. As long as it's deposited within 60 days there are no tax consequences.

Thanks to everyone who responded!