A Guide to 401(k) to IRA Rollover

As your life circumstances change, your retirement planning needs to also evolve. At Jefferson Bank, we provide a full selection of investment services including 401(k) to IRA rollover as well as other retirement accounts.

What Is an IRA Rollover?

401k to IRA Rollover Tips

An IRA rollover is a procedure to shift your retirement assets from an account tied to your employer to an IRA (Individual Retirement Account) that you control. This allows you to preserve the tax-deferred status of the funds.

The IRA rollover term is also sometimes incorrectly used when transferring funds from an IRA with one financial institution to another one. These are called IRA transfers.

Reasons Why to Use an IRA Rollover

Guide to IRA Rollover

If you withdraw funds from any retirement account – including 401(k) and IRA accounts — you’ll need to both pay a penalty and treat it as taxable income. Doing this isn’t ideal. The best way to transfer funds out of a 401(k), while avoiding additional taxes or penalties, is to use an IRA rollover.

Another reason to use IRA rollovers to get funds out of a 401(k) account is to avoid the restrictions that employers often place on how 401(k) funds can be invested. By using a rollover, you can take greater control over how you invest your retirement funds. You can either do your IRA rollover to a Traditional IRA or Roth IRA. Please consult your tax advisor for advice on which rollover is best for you.

At Jefferson Bank, our experienced bankers will be glad to help you through this process. We make rollovers easy! Call us at 314-621-0100 or use our online contact form to get in touch with one of our St. Louis banks and to learn how we can help with your retirement planning.

401(k) to IRA Rollover

IRA Rollover in St. Louis

The most effective way to handle an IRA rollover is to do a direct rollover from the 401(k) plan to a traditional IRA. In this situation, you don’t pay taxes on the funds and interest earned until you withdraw them.

You may also do an IRA rollover to a Roth IRA. Interest earned on the Roth IRA won’t be taxed for the length of time it is kept in the account. Withdrawals from the Roth IRA made after the age of 59 ½ are generally not taxable because tax is paid on income when the amounts are contributed to the Roth IRA.

New IRS Rules That Could Affect Your IRA Rollover

New IRS rules dating to 2015 mandate that you can only make one IRA rollover per 12 month period with the exception of trustee-to-trustee transfers and rollovers from traditional to Roth IRAs (so-called ‘conversion’ IRA rollovers).

How Jefferson Bank Can Make Your IRA Rollover Simple

If you decide an IRA rollover is right for you, the process is simple. Just call one of our banks in St. Louis at 314-621-0100 and have information about your employer-based retirement plan ready. A helpful Jefferson banker will answer all of your questions and will assist you in the process.