401(k) Rollover Financial Advisor

A 401(k) rollover moves eligible retirement assets from a 401(k) into another eligible retirement account, such as another employer retirement plan or an IRA. A properly completed rollover generally does not create current income tax when the assets remain in the appropriate tax-deferred account.

It depends on the specific 401(k) and your financial situation. Investment choices, fees, withdrawal rules, creditor protections, employer stock, backdoor Roth planning, and your retirement-income strategy should all be considered before deciding.

Depending on the plan and your circumstances, you may be able to leave the money in the former employer's plan, move it into a new employer plan, roll it into an IRA, or take a distribution. A Roth conversion may also be considered for eligible pre-tax retirement assets.

A properly completed rollover from a traditional 401(k) to another eligible traditional retirement account generally is not taxable at the time of the rollover. A conversion of pre-tax 401(k) assets to a Roth IRA is different and generally creates taxable income on the converted amount.

A direct rollover occurs when the retirement plan sends the eligible retirement assets directly to another retirement plan or IRA rather than paying the distribution to you personally. This generally avoids mandatory 20% federal withholding on an eligible distribution.

If an eligible plan distribution is paid to you, the plan generally must withhold 20% for federal income taxes. You generally have 60 days to complete the rollover. To roll over the full eligible distribution, you generally need to make up the withheld amount with other funds.

Generally, yes, if the receiving employer's plan accepts incoming rollovers and the distribution is eligible. The receiving plan's investment options, fees, and other provisions should be reviewed before moving the assets.

Generally, an eligible Roth 401(k) balance can be rolled into a Roth IRA. The tax treatment depends on the account history and whether the distribution is qualified, so the rollover should be handled carefully.

A pre-tax 401(k) rolled into a Roth IRA is generally treated as a Roth conversion, meaning the taxable portion generally becomes income in the year of the conversion. Whether that makes sense depends on your current and expected future tax situation.

The Rule of 55 can allow certain withdrawals from an employer retirement plan without the 10% additional tax after leaving an employer during or after the year you reach age 55, subject to applicable requirements. Moving those assets into an IRA can change how this exception applies.

Not necessarily. Appreciated employer stock inside a retirement plan may qualify for special tax treatment under the net unrealized appreciation rules. The potential tax consequences should be reviewed before the stock is rolled into an IRA.

It can. Rolling pre-tax 401(k) assets into a traditional IRA can create an IRA balance that affects the tax calculation for a backdoor Roth IRA. This is one reason the rollover decision should be coordinated with broader tax planning.

Sometimes. Whether you can move money from a current employer's 401(k) while still employed depends on the plan's provisions and the type of distribution. An old 401(k) from a previous employer is generally subject to different rules.

Yes. A financial advisor can help evaluate the existing plan against the available alternatives, identify tax and retirement-planning considerations, and coordinate the investment strategy after the rollover. The advisor should not assume that an IRA rollover is automatically the right choice.

The cost depends on the advisor's compensation structure and the scope of advice. Inclinevest Wealth Management is a fee-only firm and provides pricing information on its services and fees page.

Yes. Inclinevest Wealth Management is based in Greenwood Village and serves people throughout Denver, South Denver, Centennial, Englewood, Highlands Ranch, Aurora, Parker, Lone Tree, Littleton, and surrounding Colorado communities.