The Money Mustache Community
Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: Jeremy E. on August 24, 2016, 10:42:00 AM
-
My company is starting an LLC that I will be joining, I have to sign transfer papers by the end of the month. I'll use the same 401k company. Is it possible to rollover my 401k into an IRA during this transition? If so, would I contact my 401k provider or my HR department? Would I want to do it before or after signing transfer papers?
-
I got a response from HR, and was told when you are an employee of X (the company that I'm currently a part of), you are not able to rollover funds from your 401(k).
I'm thinking about responding that "I will no longer be an employee of X, and instead will be an employee of X LLC", but I want to try and say it in a nice way and make sure it's possible before pushing the matter too much.
-
Are they setting up a new 401k plan for the new LLC or will employees of the new LLC be participating in the same plan? If there will be a new plan for the new LLC I think you would be able to roll it over to an IRA.
-
Are they setting up a new 401k plan for the new LLC or will employees of the new LLC be participating in the same plan? If there will be a new plan for the new LLC I think you would be able to roll it over to an IRA.
Same plan, but I still think because I am leaving one company and joining another, I should be able to do the rollover
-
Probably not, but it will depend on the plan. The reason you can rollover old 401k balances is not because you're leaving a company, it's because you're no longer eligible to contribute to the company's 401k plan. Most plans make you ineligible to continue participating if you're not working there anymore. Since the plan is being transferred, you're not leaving it, and so your ability to roll it over is not triggered. You see this sometimes with corp acquisitions.
To answer this definitively you need to look at the actual plan documents. Or you can check out the IRS model plan, on which most 401k plans are based.
-
I guess I'll just leave it be, we have some decent Vanguard options in our 401k, I feel my money would be a tiny bit "safer" in an IRA (no chance of my 401k fund options changing, changing 401k provider with different rules/funds etc. ), but I don't think it's important enough to argue with HR.