401k Rollover to IRA’s

Submitted by Ron Davidson on Wed, 2014-05-14 16:33

If someone does a rollover from a 401k institution to an Institution in
an IRA money market and addition wants to immediately to diversify
their portfolio and transfers one or two IRA financial
vehicles with one or two additional institutions. Can this be done
under new rules? Example:
1. 401k to IRA Money Market because their custodian will only allow them
to do one rollover.
2. In order to diversify for an example establish a SPIA from another
institution and does a transfer form to process this account.
3. And they want to purchase stocks from a Brokerage Firm with the remaining rollover.
Can this be done without a problem?



Submitted by Alan - IRA critic on Wed, 2014-05-14 17:24

  •  Rollovers from a 401k do not count against the one rollover rule, but your 401k plan could limit the number of rollovers you do for other reasons.
  • Be very careful about insurance agents selling annuities. In most cases you are better off keeping annuities out of your IRA accounts, except perhaps when you are quite old and expect to outlive your life expectancy. Also, if you are anywhere near RMD age and you annuitize, the payouts will become RMDs and not eligible for rollover. But to answer your question, if you move funds from one IRA account to another by direct transfer, it does not count as a rollover, and you can do as many direct transfers as you want. These are also not reportable on your tax return and you will not get a 1099R.
  • Purchase of mutual funds, stocks etc from your IRA is not a rollover and not a problem. For the one rollover rules, you only need to limit IRA to IRA indirect rollovers where the check is made out to you personally. These are limited to one in a 12 month period.
  • It is the annuity you should think twice about. Annuites produce large commissions and once you go that way, it is very costly to get out of them.

 



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