401K Retirement Plan: 401k rollover rules

401 k Rollovers 401k plans have some specific rollover and transfer rules and procedures. A rollover is when money is taken out of a 401k or other qualified retirement plan and "rolled over" into another type of qualified plan. These other plans include IRA's. Each time a rollover is done out of a 401k plan, it must be completed within 60 days and the money may not be cashed or placed in another account during that time. Rollovers can only take place once a year. An account transfer does not have to follow the 401k rules and guidelines. An account transfer is when a 401k plan is moved from one brokerage firm to another. Loans may be also taken on 401k balances. Cash withdrawals are subject to the pre 59 1/2 years old IRS standard penalty of 10% on the amount withdrawn and the total amount is taxed as ordinary income for tax purposes. Vesting The vesting period in a 401k investment account is the time the employee must fullfill their years to ne 100% vested. This means all contributions made by the company under the plan are 100% available to the person should they leave their job. The vesting period under these accounts can vary. Usually this period runs 5 years. Investments The securities account or investments within the 401k are varied with each plan or company. Usually, the employee will have a wide array of mutual fund or other fund choices to dedicate investment money to. The investor can change the allocation and choices in the 401k as they see fit. Rates of return and retirement value will vary with the performance of the securities in the investment account. Stock Trading Course

Source: http://401k-retirement-account.blogspot.com/2012/07/401k-rollover-rules.html

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