Author Topic: What to do with old 401k's and annuities?  (Read 520 times)

Monoposto

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What to do with old 401k's and annuities?
« on: June 30, 2019, 12:29:45 PM »
So I have two old 401k's. The first I have no idea who the 401k provider is as my first co. Changed it just about every year I was there. The second is with John Hancock (bleh) and is probably one of the worst 401ks I've ever seen in my short working career. I also have two annuities that my dad set up when I was younger after the passing of a relative.  He put that small inheritance into two annuities that need to be signed over to me now.

Here are the totals or estimates of the totals:
401k #1: ~11,000+
401k #2: ~800+
Annuity #1: 1,300
Annuity #2: 1,500

What I want to do is, open a vanguard roth IRA and move all of the money from these old accounts into the vanguard account (still need to open it fyi).

I have two problems.  I have no idea who the plan provider is for my first company anymore or if it even matters? My 401ks are tied to my ssn, so vanguard should be able to find them no?

Once I sign the annuities into my name and want to transfer them into the vanguard account will I have to pay taxes? Also, assuming this all works to plan. Will I still be able to put 6k into the vanguard account for this year?

Any advice/help on this would be appreciated!

MDM

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Re: What to do with old 401k's and annuities?
« Reply #1 on: June 30, 2019, 03:24:55 PM »
What I want to do is, open a vanguard roth IRA and move all of the money from these old accounts into the vanguard account (still need to open it fyi).
You want to pay tax due on the conversion to Roth?  If so, fine.  If not, you could roll the old 401ks into a traditional IRA or current 401k.

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I have two problems.  I have no idea who the plan provider is for my first company anymore or if it even matters?
It matters because you have to know who is holding the money.
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My 401ks are tied to my ssn, so vanguard should be able to find them no?
No.  Vanguard can help you move the money, but (fortunately) you can't simply give Vanguard your ssn and then they search all brokerages for your accounts.

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Once I sign the annuities into my name and want to transfer them into the vanguard account will I have to pay taxes?
Are the annuities in an IRA now?

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Also, assuming this all works to plan. Will I still be able to put 6k into the vanguard account for this year?
Yes (assuming you meet income limits).  Rollovers and conversion amounts are not subtracted from the $6K contribution limit.

plog

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Re: What to do with old 401k's and annuities?
« Reply #2 on: June 30, 2019, 03:29:52 PM »
Good news bad news.  Good--there's not a lot of money at stake if you screw this up.  Bad new--I can tell you aren't that well versed in the investments you have and will need to do a lot of research/work to get everything moved correctly. 

Lots to unpack:

~You can't directly move a traditional 401k to a roth IRA.  It's gonna have to first stop into a traditional ira. Do you know if your 401k's are traditional or roth?

~Not every annuity qualifies to have their funds go into an IRA. Are the annunities retirement funds?  Are they even yours?  What's all this transfer talk about?  Confusing.

~There's no global 401k list that you can just go to and give your SSN.  You need to track these funds down yourself.  I would start by caling HR of the employer you acquired them with.

~You can put 6k of that years earned income into an IRA every year regardless of any roll overs.  But,I'm not sure those annuities are rolloveralbe.  If you put those funds into an IRA they might count against the 6k.

Read up on 401ks, annuities, ira's, and rolling overs. And start finding out more about the details of your funds.

MDM

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Re: What to do with old 401k's and annuities?
« Reply #3 on: June 30, 2019, 04:09:31 PM »
~You can't directly move a traditional 401k to a roth IRA.  It's gonna have to first stop into a traditional ira.
Not true.  See https://www.irs.gov/pub/irs-tege/rollover_chart.pdf.

Note that the rothira.com site gives conflicting info: 401K Rollover Options: Should You Rollover Your 401(k)? | RothIRA.com vs. 3 Benefits of a Direct 401(k) Rollover into a Roth IRA | RothIRA.com.

IANAL, but trusting the IRS site seems the best bet. :)


Sibley

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Re: What to do with old 401k's and annuities?
« Reply #4 on: July 01, 2019, 07:55:58 AM »
Once you have located the old 401k's, Vanguard can help you roll them over. Finding them is your problem however. Is the company still around to call and ask?

Monoposto

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Re: What to do with old 401k's and annuities?
« Reply #5 on: July 05, 2019, 04:33:02 PM »
Thank you for your replies. I will track down the 401k!  Luckily i left the company on good terms so it hopefully wont be too difficult. It sounds like I can roll this over into an IRA, then move them from the IRA to the roth IRA? Correct?

As for the annuities.  These were set up by my father when I was very young. They are currently in his name but now need to be transferred into my name.

MDM

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Re: What to do with old 401k's and annuities?
« Reply #6 on: July 05, 2019, 04:48:45 PM »
It sounds like I can roll this over into an IRA, then move them from the IRA to the roth IRA? Correct?
You can do it that way, but you can also go direct from the 401k to a Roth IRA if you so choose.

Either way, it will count as ordinary income when it goes into the Roth IRA.

erutio

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Re: What to do with old 401k's and annuities?
« Reply #7 on: July 05, 2019, 06:25:05 PM »
Why do you want to roll your old 401ks into a roth specifically?  Versus rolling into a Tira or your current 401k.