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Old 12-30-2017, 07:17 AM
 
Location: cary, nc
585 posts, read 337,440 times
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I will be switching jobs in January. I currently have a 401k, that I plan to move to an IRA of my choice shortly after (January as well).
During the course of the next year, I'm also planning to take advantage of an IRA rule, which allows me to take money out of my IRA and put it back, as long as I can do it within 60 days.

Anyone sees anything wrong with that? A friend says I can only perform one rollover per year, regardless if the money goes into another retirement account or the same.
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Old 12-30-2017, 08:01 AM
 
64,681 posts, read 66,183,819 times
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your friend is correct .

it is risky , if paperwork gets screwed up or a check lost you could blow it if it goes over 60 days .

i always would use custodian to custodian .

anything i wanted to do with that money , if i couldn't do it without it ,i likely shouldn't be doing .
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Old 12-30-2017, 08:24 AM
 
Location: San Ramon, Seattle, Anchorage, Reykjavik
1,624 posts, read 693,846 times
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Quote:
Originally Posted by mathjak107 View Post
anything i wanted to do with that money , if i couldn't do it without it ,i likely shouldn't be doing .
Amen on that one.
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Old 12-30-2017, 10:43 AM
 
Location: cary, nc
585 posts, read 337,440 times
Reputation: 650
Thanks for the input.
Isn't there some type of rule to protect against such scenarios you describe such as Financial institution delays, lost checks, ... etc ?
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Old 12-30-2017, 10:52 AM
 
Location: Texas
5,774 posts, read 6,658,333 times
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Quote:
Originally Posted by henriInCary View Post
Thanks for the input.
Isn't there some type of rule to protect against such scenarios you describe such as Financial institution delays, lost checks, ... etc ?
Nope. Not unless it's a direct cause/mistake of your institution. If that is the case, they can attest that fact to the IRS and post date your "repatriation" of the funds to a date that will satisfy. However, that is a very limited action and the IRS stipulates only select reasons that they will allow.
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Old 12-30-2017, 12:14 PM
 
64,681 posts, read 66,183,819 times
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Quote:
Originally Posted by henriInCary View Post
Thanks for the input.
Isn't there some type of rule to protect against such scenarios you describe such as Financial institution delays, lost checks, ... etc ?
it is a risky game taking possession
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Old 01-01-2018, 04:09 PM
 
Location: Silicon Valley
2,764 posts, read 1,216,199 times
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Quote:
Originally Posted by mathjak107 View Post
it is a risky game taking possession
I'll second that. Job switches can be expensive, and the last thing you want is to suddenly come up with enough money to pay tax on taking your own money + a 10% of amount penalty and state tax that is now not deductible.

With that in mind I almost don't want to bring it up, but I thought the Senate version of the tax bill had given some more latitude in how one could take their money from their 401K temporarily but still beyond the 60 days....but I HAVE NOT seen the final bill and would definitely consult with a professional tax planner prior to acting.

Another thing to consider is that if you are attempting to do an investment that's outside of your IRA guidelines, there MAY be more flexibility in getting a self directed IRA and starting an investment LLC. There are loads of regulations on this however, including anything remotely resembling self-dealing. Even that takes 6 weeks to get ready though and will cost you $1000 and there's annual filing charges.

For 99% of people, the best thing to do is to roll it over directly and to choose from the allowable investments. Who knows, you may be able to roll it over into a new employer plan and take a $50K loan and repay it over time.

Also a thing to remember. Your 401K is protected. You go bankrupt, your 401K is still fine. You go outside of the 401K and you lose that protection.
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Old 01-01-2018, 04:26 PM
 
64,681 posts, read 66,183,819 times
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The flip side though is have the company you work for have financial issues and it can be a horror.

A company i worked for fell on hard times. Next thing we know is they terminated the 401k . The funds were liquidated for non payment of the administrating fees . Now the court is in charge until they can get a new custodian to distribute the funds . It took 6 months and the money is dead and not invested in a thing.
There are stories of people trying to get their money distributed for more than a year.

I never reccomend leaving money in any 401k that you can get rolled over to your ira. It one of those things you dont think about until it happens.

I would . never leave money with a company i no longer worked for
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Old 01-01-2018, 05:38 PM
 
Location: Silicon Valley
2,764 posts, read 1,216,199 times
Reputation: 5091
Quote:
Originally Posted by mathjak107 View Post
The flip side though is have the company you work for have financial issues and it can be a horror.

A company i worked for fell on hard times. Next thing we know is they terminated the 401k . The funds were liquidated for non payment of the administrating fees . Now the court is in charge until they can get a new custodian to distribute the funds . It took 6 months and the money is dead and not invested in a thing.
There are stories of people trying to get their money distributed for more than a year.

I never reccomend leaving money in any 401k that you can get rolled over to your ira. It one of those things you dont think about until it happens.

I would . never leave money with a company i no longer worked for
Wow...that's horrible. While most companies do pick up the tab of the plan, I recall needing to select if the company was going to pay it or if the costs would be prorated from the employee accounts. Both are allowed. Dead money can also be allocated to costs if I recall correctly. (i.e. company match that never vested)

At any rate, I too also move my money from a 401K to my own IRA as soon as I can. Directly as well with a date of transfer at termination + 3 business days, which is how long they have to fund your last check 401K contribution if they're a smaller company plus a day for processing.

However I have made one time contributions to my employer plans to take advantage of 401K loans to put together downpayments for acquiring homes without an issue several times. Basically send whatever's needed to get to $100K to the plan, take the $50K loan and buy the house. The employer loves it because...well, unless you can pay it all back, you're not going anywhere...though sometimes the fund choices are not great.

Generally not a great idea, but when you're looking at gross rents of less than 8 years stemming from market price declines of 50-65% you start following the blood trail. I suppose being the Controller of the company also assuaged 401K payment fears a bit as well. Now that we're in the mid-20's despite rising rents my money can stay in the IRA.
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Old 01-02-2018, 02:16 AM
 
64,681 posts, read 66,183,819 times
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we never had any option to pay the fees . it was a single company account and it was shut down on us .

the dilemma was that we knew the company was having credit issues but no one ever thought they would fold. i was there 25 years and they were in business 70 years . as long as we were employed there was no in service withdrawals allowed .

so once the plan was terminated , that was it the money was trapped .

not only that but our profit sharing money was trapped for a year . it required all spousal consent forms be signed by spouses that they were aware the money was being distributed .

it required notices in papers to track down ex employees and all kinds of investigative work before a penny could leave .

so here we are still working for a company and none of us saw the end coming . what chance does someone have when they leave their money in a former plan and don't work for the company .

i cringe when i see people say they left their money with a former employer .

there is nothing better than getting your money under your control when you can . you usually have not only better choices to invest but lower cost too .

i rather risk my own personal bankruptcy than the companies
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