The process of rollover is very simple. You should decide which investment company you want to put this money. There are many companies in the market like AmeriPrise Financial, Schwab or TD AmeriTrade. You can select one of them and contact them for 401(k) rollover. There is a small form which you need to fill up. This form is very easy as it contains your basic information and details of your 401(k). Once you send them this form, they will start working on it.
In the meantime you should contact your former employer and request him for a rollover. You will be again required to fill up a form for such request. Within two weeks of this paperwork you should receive a positive confirmation from both your former employer and the investment company where you are going to rollover the money. And that's all you need to do.
The process looks very simple but there are some hidden dangers behind.
Remember, there is a time limit for taking the rollover decision. In case of you delay, your former employer has two options - he may allow you to continue in the company plan on he may send you the balance by check to get rid of you.
Keeping the money with your former employer is not a good option. They may not offer a wide range of investments, so your choice is limited. The returns may not be lucrative in this option.
Receiving a check of your 401(k) balance is worst option. You should never deposit that check into bank. That money will be considered your income for that year and you will be paying of tax on that! Then you will start using that money here and there. This is your retirement money and you should not spend it just in the middle of your career for less important things. So the best option is - rollover that money to an investment company of your choice and take care of your retirement.
401(k) rollover is indeed the best option when you change your job. It will get you great flexibility and you may not be required to contribute big money to continue with it. The only condition is - you should act fast.
You change your job frequently, depending on your career prospects, opportunities and pay rise. It's absolutely fine, but what about your retirement benefits? Your 401(k) account needs a rollover. You need to do it quickly with some precautions. What are they? Chintamani Abhyankar explains.
Chintamani Abhyankar, is a well known expert in the field of finance and taxation for last 25 years. He has written many books explaining inside secrets of the magic world of personal finance. His famous eBook Stop donating your money to IRS which is now running in its second edition, provides intricate knowledge and valuable tips on personal finance and income tax.
Article Source: http://EzineArticles.com/?expert=Chintamani_Abhyankar
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