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0:00 7-Step 401k Rollover
0:23 Step 1: Decide where to open an IRA
The two primary choices are a traditional broker or a robo-advisor
2:00 Step 2: Select the type of IRA account
For most, I believe a Rollover IRA is the best option
4:18 Step 3: Get help from IRA provider
Don’t call your 401k company to start the process. Start with your new IRA provider.
5:17 Step 4: Contact your 401k provider
It’s here that you’ll initiate the rollover
7:10 Step 5: Deposit check into Rollover IRA
It’s critical that this happen within 60 days to avoid taxes and penalties.
7:40 Step 6: Invest the money
When the money is deposited in your Rollover IRA, it will go into a cash account. You must invest in according to your investment plan
8:00 Step 7: Designate beneficiaries
It’s critical to designate primary and secondary beneficiaries. Consult your trust and estates attorney for advice.
If you want to rollover a 401k to an IRA, it’s critical that you get the process right. One mistake can trigger taxes and even penalties. It starts with deciding where to open your Rollover IRA. I recently chose Merrill Edge, but there are other good brokers. You might also select a robo-advisor like Betterment or Wealthfront. One you decide, the next step is to call the IRA provider. Don’t start with your 401k provider. The IRA company can help you through the process. If the rollover is by check, make sure to get it deposited into your new Rollover IRA within 60 days. If you don’t, the IRS could deem it a distribution and charge you taxes and a penalty. Once it’s in the new IRA, be sure to invest the money according to your plan and set the primary and secondary beneficiaries.
ABOUT ME
While still working as a trial attorney in the securities field, I started writing about personal finance and investing In 2007. In 2013 I started the Doughroller Money Podcast, which has been downloaded millions of times. Today I’m the Deputy Editor of Forbes Advisor, managing a growing team of editors and writers that produce content to help readers make the most of their money.
I’m also the author of Retire Before Mom and Dad–The Simple Numbers Behind a Lifetime of Financial Freedom (
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DISCLAIMER: I am not a financial adviser. These videos are for educational purposes only. Investing of any kind involves risk. Your investment and other financial decisions are solely your responsibility. It is imperative that you conduct your own research and seek professional advice as necessary. I am merely sharing my opinions.
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why leave Fidelity? you didn't go into that. thanks
S U B S C R I B E D !
I’m trying to repay a $99k corona-related distribution from 401K(fidelity) in 2020.
I want to open a Merrill edge traditional IRA account and just invest the $99k in a vanguard etf VTI.
The $99k is coming from my Bank of America checking.
Any tips on how to do this?
Hey rob where are you doing now before 401k to your Roth IRA at betterment. Do you need to put in a new account or can you put it into an existing Roth account
Hi Rob,How is the case if employer's 401k is having both pretax and post tax contribution. Does rollover IRA accommodate both or we need both type of IRA accounts (rollover IRA + roth IRA for post tax).
@Rob Berger. New subscriber here. What do you recommend should be my allocation for my 401k? I’m 54 and I’m putting my over $200k on Large Cap at 80%, Middle Cap and Small Cap at 10% each. Any suggestions are greatly appreciated. Thanks
Hi Rob, thanks for the thoughtful videos, I'm a hooked viewer. Is there any way to roll over a 401k from a former employer (held at Fidelity) to my Vanguard Rollover IRA without first liquidating the positions held at Fidelity account? I don't like the idea of losing exposure to the market. From the video it sounded as if that's not the case, but thought to check in with you to confirm. I might just keep the money with Fidelity if I have to liquidate it. Thanks!
i am a bit confused on this one. I am planning to start doing some roth conversions when i retire next year. (From TSP deferred to a Fidelity IRA- then pay taxes and to my Roth IRA). Can't I do that directly to the regular IRA. Is that a bad idea? TSP is a bit of a beast when it comes to transfers in and out. They warn about 10 to 20 or more days just to process.
contemplating doing this (401k to IRA to ROTH)
Thank you, Rob. I'm assuming the process would be similar for a 403(b)
Thank you this step by step review. Would there be fees from the funds for liquidating while in this process?
What about 457b or 401a plans, would those follow the same step and put into a rollover IRA
Excellent information.
Is another benefit of using a rollover ira instead of traditional that it allows you to do backdoor roth? Think I heard bd roth wasn't possible if you have a traditional ira.