Starting a Pension and 401k Rollover

By Cathy DeWitt Dunn

You are encouraged to discuss rolling money from one account to another with your financial advisor/planner, considering any potential fees and/or limitation of investment options.

Learn the answers to the 5 most important 401k Rollover questions to protect your retirement savings.

• What is a 401k rollover?
• How does it help me?
• When should I rollover my 401k or pension fund?
• What’s the catch?
• What do I need to get started?

What is a 401k rollover?

A “rollover” is a term for transferring tax-deferred retirement savings (such as money held in a 401k or Pension Plan) from one account to another. If it is done correctly, a 401k rollover can go a long way to helping deliver peace of mind and a safer, more secure retirement future. Our Dallas and Fort Worth 401k rollover experts can help ensure that the process is as seamless as possible.

A roll over for your 401k or company pension can help you:

• Enjoy portfolio growth with zero downside risk
• Implement a smart retirement income solution with income you can’t outlive
• Maximize your retirement paycheck with the best payout rates available

When should I rollover my 401k or pension fund?

If you are currently contributing with your employer to a 401k and are 59 ½ or older, OR have left your employer, you owe it to yourself to look into your 401k rollover options––especially if you are nearing retirement and looking to generate guaranteed lifetime income. Money held in a 401k is vulnerable to stock market loss, and it is also typically heavily weighted with your company’s stock, which exposes you to unnecessary risk. This is especially true in a company pension plan.

Have you recently left your place of employment? You should also consider your 401(k) rollover options. If this is the case, you may want to consider moving your balance to an IRA account.

If you have a pension fund, you may be able initiate a rollover as soon as you turn 59 ½ years old or when you’ve left the employer. Some employers require you to wait until you leave the company regardless of age. We can help you navigate your company’s plan rules to see if you are rollover eligible.

Whether you are retiring or switching jobs, you have 401(k) rollover options, such as:

• Rolling your funds into a new employer’s plan if you are moving to a new job.
• Rolling them into an annuity or IRA to change up your portfolio mix.
• You can rollover your 401k or a lump sum from a pension into a fixed index annuity without paying taxes. These annuities offer a guaranteed lifetime income plus a death benefit, allowing you to participate in stock market gains without ever putting your principal at risk. Annuities funded with these retirement savings plans are considered “qualified” plans. The insurance company will create an “IRA annuity” where you can directly deposit your funds.

What’s the catch?

The main “catch” is making sure you do your rollover right. Having the funds directly transferred (a “direct rollover”) from your old account to your new account without ever touching the money yourself is usually the best solution. If you have the check made out directly to you, you can face stiff IRS penalties unless you redeposit the fund in a qualified plan within 60 days – however, there are restrictions on 60-day rollovers you need to know. The forms can be confusing so be sure to contact us today. We’d be happy to walk you through the entire rollover process. Be sure to contact our Dallas 401k rollover experts.

What do I need to start my 401k Rollover?

There are four basic things you need to do:

1. Gather up your latest statement, which will show the amount you have saved along with how much you and your employer (if they offer a matching program) have contributed.
2. Decide what you will roll it into. Contact the experts at Annuity Watch USA to explore your options. It may make sense to roll over your funds into an income-generating product like a fixed index annuity.
3. Set up a new account. Our 401k rollover Dallas and Fort Worth experts can assist with any paperwork to make the transition as smooth as possible.
4. Initiate the rollover. Once all the paperwork is complete, simply specify that you want your funds transferred directly from the old to the new account. 

Anyone in DFW can meet with our experts in person to discuss your 401(k) rollover in Dallas and Fort Worth. We walk you through the process and ensure it is completed correctly to protect your money.

Related Articles from DeWitt & Dunn Financial Services and Annuity Watch USA

• 4 Types of Annuities
• Longevity Analysis
• Income Plan Request

Disclosure: Guarantees and benefits are subject to the claims paying ability of the issuing insurance company.

You are encouraged to discuss rolling money from one account to another with your financial advisor/planner, considering any potential fees and/or limitations of investment options.