Quote:
Originally Posted by GregWeld
You might want to include a TAX professional in this discussion BEFORE actually taking any action. One slip up and you get killed. The IRS is not very forgiving.
I once had a check sent to me --- and deposited it into my account --- to transfer into the IRA..... BIG MISTAKE -- paid takes and a PENALTY for that little slip. Even though it was an honest mistake --- they could care less.
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I'm not an expert on this but I do know this much. You can only convert a 401k to a traditional IRA if you no longer work at the company that you had the 401k with. In my case I didn't change jobs but I changed employers when we were bought out. This made me eligible to make the transfer. As long as you still work for the company that you have the 401k with you're stuck there.
The other key factor is to do a trustee to trustee exchange, i.e. from your 401k administrator directly to say Schwab or other brokerage. LIke The Master said, the money must not touch your hands or any of your personal accounts in any way. Schwab is REALLY good, if you call them they can explain to you just how to do it without any penalty