🚀 go-pugleaf

In article <C04qJy.40H@jti.com> richb@jti.com (Richard Braun) writes:
|I have a simple financial-planning question, brought on by some paperwork
|sent me by a former employer:
|
|Given that my new employer has no retirement plan, I can't roll over my
|balance at a previous employer's 401K plan into a similar one.  It appears
|I have two options:
|
|	- Leave it where it is
|	- Roll it into a personal IRA
|
|As I understand it, I have more options as to what I can do with the money
|(such as borrowing against it) if it stays in a 401K plan, though of course
|I'd have a lot more control over investment options if I moved it.  If I
|kept this money separate from other IRA accounts, could I later roll it
|(or even some of the other accounts) into a new 401K?
|
|Which option is wisest for now?  And is it possible to set up anything
|remotely resembling a 401K while working for an employer that has
|none?  (My income is above the ceilings for IRA deductability, and in
|any case the limits on IRA contributions are IMHO too low.)
|
|-rich

Something else to remember.  The IRS changed the rules on rollovers
as of 1-Jan-93.  If you don't have your rollover funds sent directly
to their new home via electronic transfer [ie: you ask for a check],
the company giving you the money from the 401K will only give you 80%
of your $$.  The remaining 20% is withheld as an IRS withholding.  If
you reinvest 100% of your 401k funds, the IRS will refund the 20%
withholding to you at tax time.  The catch is, you have to come up with
the missing 20% to make up your 100% rollover!  If you don't invest
the full 100%, you get socked with the 10% [?] early withdrawaly fee
on the amount not reinvested.  If your 401k rollover is a large amount,
it could be quite difficult getting the missing 20% funds.


This was written up in the Sunday Boston Globe last week [27-Dec-92?].


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