[Katie]

I am very new and trying to learn and figure things out to get us on the right path. I am self-employed, however, I have retirement funds sitting in Lincoln from my previous employer. I have a 401K, IRA, and a Roth IRA.

I would like to move them out of Lincoln, but I am not sure what the best option is. I have seen Schwab, Fidelity, and Vanguard.

Any recommendations? Also, does the 401K get rolled into and IRA when you move it?

I’m not sure how this all works. Any insight is appreciated!

TIA!

[Karen]

If the balance in your employer’s plan is more than $7,000, you don’t absolutely have to move it if you like the investment options – your employer can’t distribute It without your consent.

If it’s under $7,000, some (not all) employers will force you out, meaning that if you don’t roll it out or take a direct distribution by the stated deadline, they will cash you out and you’ll owe taxes + possible penalties on it.

Either way, to roll it to an IRA or other employer plan, you must contact Lincoln and give them instructions.

[William]

After separation of service with an employer, you can choose to roll over your 401k funds into your IRA.

To avoid what’s known as an “in flight conversion” (and triggering a potentially substantial tax bill), traditional 401k funds should rollover into a traditional IRA.

Roth 401k should rollover into your Roth IRA. Which brokerage to use is one of personal preference.

I have both a Schwab account and a Fidelity account and they are both quite usable.

I also have Vanguard accounts (taxable and IRA) and really don’t recommend them anymore. I love their funds, but their brokerage platform is a joke.

[Prasad]

Platform-wise, Fidelity would be my first choice. I would stick with ETFs for everything and not use funds.

Call Fidelity and they will help you move the money.

As much as possible, do it all electronically and avoid getting paper checks mailed to you.

You can ask Fidelity how to do that.

[Prasad]

Also, have you looked into an individual 401k or a SEP IRA since you say you are self employed?

[Author]

Posts