March 4, 2009
401k Rollover Rules- Lump Sum vs. Direct
401k rollover rules apply when you transfer your qualified retirement plan money to another qualified retirement plan or a lump sum. The IRS- 401k rollover rules stipulate certain benefit events must occur to make you eligible for a rollover including retiring, changing employers and transferring to a new qualified retirement plan.
You can receive the money in two ways, either a direct roll over from plan to plan, without IRS tax and withholding taxes or a lump sum paid directly to the investor with tax and withholding consequence that stops the tax deferral build up for the future. Study the choices and decide with the help of a retirement specialist how the 401k rollover rules apply to you.
