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I just changed jobs and have a 401(k) with >$100K in it. Should I rollover to IRA? Does USAA have any options?

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Answers (1)

Answers (1)

In my mind, the golden rule when it comes to answering your question is this: whatever you do, keep the money for it's intended purpose, retirement. If you exclude cashing out (which would be my recommendation!), you've got three primary options:

 

Leave the money where it's at. If you like your current plan, it has reasonable expenses and attractive investment options you can likely leave the money in that plan. Sometimes, there can be additional fees or expenses for non-employees in the plan, so you'll want to check that out.

 

Rollover to an IRA/Roth IRA. As you note, you can rollover your plan to an IRA/Roth IRA. Generally, there are no tax consequences if you move the money from traditional to traditional or Roth to Roth. In any case, you'll want to consult with your tax advisor to understand the tax implications of your various options. It's also important to remember that a direct rollover--when the money moves directly from the employer plan to your IRA--will not result in any tax withholding. If you take a distribution from your plan (the check is made out to you), you still have 60 days to place the money in an IRA, however, 20% of the taxable amount will be withheld for federal income taxes. In order for that withholding not to be taxed and possibly subject to a 10% early withdrawal penalty, you'll have to replace the money (add it to the IRA) from your personal funds. 

 

Rollover to your new employer's plan. If you're moving on to a new job that has a solid plan, most will allow you to rollover your old employer's plan into the new one.

 

USAA definitely has options, you can contact one of our advisors at 800-771-9960 to review your situation and map out a game plan to move forward...just remember the golden rule. Take care.

 

JJ