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It might be. If additional paperwork is required, have them send it to you, and we can help you complete it if needed.
If a distribution form is required, who, aside from myself, needs to sign it before I send it back to you?It's most often a spouse, and sometimes, Fidelity.
Is a Letter of Acceptance required?Quite often, it is. But we will automatically generate one for you.
Does my account include company stock?If you have shares of company stock included in your old 401(k), it's easiest to give us a call at 800-343-3548 so that we can discuss how to include them in your rollover.
Where will you send my distribution check?It's fine to send it directly to us or to you. However, how the check is made out is very important—please ensure your provider follows the guidelines in Step 3.
Knowing whether you have pre-tax or Roth (after-tax) assets will help you figure out what type of IRA (traditional, Roth, or both) you need to open at Vanguard. If you own company stock in your plan, that may add a layer of complexity to your rollover.
What name did I use on my employer plan account?
A common situation that can delay a rollover is when a check from the current financial institution is made payable to a name that doesn't match your Vanguard account registration. Examples include use of birth name versus married name, a missing suffix (Jr., Sr., etc.), differing middle initials (John A. Doe versus John J. Doe), etc.
What are your rollover requirements?
Each employer plan will have its own rollover requirements. Some may have their own paperwork for you to fill out, while others may require a Medallion signature guarantee or additional signatures that need to be notarized. Occasionally, the plan administrator may also have to sign off on the rollover.
Are e-signatures or faxed copies allowed?
Some plans allow e-signatures and copies of paperwork. Others may require original paperwork with your original signature.
Do you need a letter of acceptance (LOA)?
Plan administrators often require an LOA from the receiving institution. This letter indicates that the receiving institution—Vanguard in this case—will accept the assets. It also lets the plan administrator know where to send your money. You can generate an LOA during our online rollover process.
Is spousal consent required?
Some plans may require a spouse to provide their signature in order to move the assets to an IRA.
Will the rollover check be sent to me or to Vanguard?
We’ll accept a check from the plan or from you. Just make sure the appropriate mailing guidelines, covered in the next step, are followed to avoid any processing delays.
If the check is sent directly to you and you're already a Vanguard client with online access, consider using our mobile check investment service offered through the Vanguard app.
By U.S. mail:
Vanguard
P.O. Box 982901
El Paso, TX 79998-2901
By registered, certified, or overnight mail:
Vanguard
5951 Luckett Court, Suite A1
El Paso, TX 79932-1882
Note: If the check is made payable to Vanguard, do not endorse it. If the check is made payable to you instead of Vanguard, you should endorse it, and mail it to us within 60 days. To avoid owing taxes or penalties on early withdrawals, check with your tax advisor.
Consider mobile check deposit
If you're already a Vanguard client and you're registered for online access, remember that you can always use our mobile check deposit option offered through the Vanguard app. It's faster than mailing a check!
When you’re logged on and using the app, just tap the Mobile check option under the main menu and then follow the instructions. Learn more about mobile check deposit
Investment products are not insured by the FDIC, NCUA or any federal agency, are not deposits or obligations of, or guaranteed by any financial institution, and involve investment risks including possible loss of principal and fluctuation in value.
Be sure you understand the potential benefits and risks of an IRA rollover before implementing. As with any decision that has tax implications, you should consult with your tax adviser prior to implementing an IRA rollover.
Diversification can help protect against certain investment risks, but does not assure a profit or protect against loss.
If you decide a 401(k) rollover is right for you, we're here to help. Call a Rollover Consultant at 866-855-5635.
One great thing about a 401(k) retirement savings plan is that your assets are often portable when you leave a job. But what should you do with them? Rolling over your 401(k) to an IRA (Individual Retirement Account) is one way to go, but you should consider your options before making a decision. There are several factors to consider based on your personal circumstances. The information provided here can help you decide.
Leave your money in your former employer's plan, if your former employer permits it
Choosing this option means you don't have to make an immediate decision about where to move your savings. Your account stays subject to your previous employer's plan rules, including investment choices, costs, and withdrawal options.
Pros- No immediate action is required.
- Any earnings remain tax-deferred1 until you withdraw them.
- You may have access to investment choices, loans, distribution options, and other services and features that are not available with a new 401(k) or an IRA.
- You still have the option of rolling over to an IRA or to a 401(k) offered by a new employer in the future, if the new employer's plan accepts rollovers.
- Your former employer may offer additional services, such as investing tools and guidance.
- Under federal law, assets in a 401(k) are typically protected from claims by creditors.
- Your former employer's plan may have lower administrative and/or investment fees and expenses than a new 401(k) or an IRA.
- You may be able to take a partial distribution or receive installment payments from your former employer's plan.
- If you leave your job between ages 55 and 59½, you may be able to take penalty-free withdrawals.
- Required minimum distributions (RMDs) may be delayed beyond age 72 if you're still working.
- If you hold stock in your former employer in the plan, you may have special tax or financial planning needs you should consider before rolling over your assets to a new employer's 401(k) or an IRA.
- You can no longer contribute to a former employer's 401(k).
- Your range of investment choices and your ability to transfer assets among funds may be limited.
- Managing savings left in multiple plans can be complicated.
- The fees and expenses for your former employer's 401(k) may be higher than those for a new employer's 401(k) or an IRA.
Roll over your money to a new 401(k) plan, if this option is available
If you're starting a new job, moving your retirement savings to your new employer's plan could be an option. A new 401(k) plan may offer benefits similar to those in your former employer's plan. Depending on your circumstances, if you roll over your money from your old 401(k) to a new one, you'll be able to keep your retirement savings all in one place. Doing this can make sense if you prefer your new plan's features, costs, and investment options.
Pros- Any earnings accrue tax-deferred.1
- You may be able to borrow against the new 401(k) account if plan loans are available.
- Under federal law, assets in a 401(k) are typically protected from claims by creditors.
- You may have access to investment choices, loans, distribution options, and other services and features in your new 401(k) that are not available in your former employer's 401(k) or an IRA.
- The new 401(k) may have lower administrative and/or investment fees and expenses than your former employer's 401(k) or an IRA.
- Required minimum distributions (RMDs) may be delayed beyond age 72 if you're still working.
- You may have a limited range of investment choices in the new 401(k).
- Fees and expenses could be higher than they were for your former employer's 401(k) or an IRA.
- Rolling over company stock may have negative tax implications.
Roll over your 401(k) to a Traditional IRA
If you're switching jobs or retiring, rolling over your 401(k) to a Traditional IRA may give you more flexibility in managing your savings. Traditional IRAs are tax-deferred1 retirement accounts.
Pros- Your money can continue to grow tax-deferred.1
- You may have access to investment choices that are not available in your former employer's 401(k) or a new employer's plan.
- You may be able to consolidate several retirement accounts into a single IRA to simplify management.
- Your IRA provider may offer additional services, such as investing tools and guidance.
- You can't borrow against an IRA as you can with a 401(k).
- Depending on the IRA provider you choose, you may pay annual fees or other fees for maintaining your IRA, or you may face higher investing fees, pricing, and expenses than you would with a 401(k).
- Some investments that are offered in a 401(k) plan may not be offered in an IRA.
- Your IRA assets are generally protected from creditors only in the case of bankruptcy.
- Rolling over company stock may have negative tax implications.
- Whether or not you're still working at age 72 (70½ if turning 70½ in 2019 or earlier) RMDs are required from Traditional IRAs.
Roll over your 401(k) to a Roth IRA
If you're transitioning to a new job or heading into retirement, rolling over your 401(k) to a Roth IRA can help you continue to save for retirement while letting any earnings grow tax-free.2
Pros- You can roll Roth 401(k) contributions and earnings directly into a Roth IRA tax-free.2
- Any additional contributions and earnings can grow tax-free.2
- You are not required to take RMDs.
- You may have more investment choices than what was available in your former employer's 401(k).
- Your Roth IRA provider may offer additional services, such as investing tools and guidance.
- You can consolidate multiple retirement accounts into a single Roth IRA to simplify management.
- You can't borrow against a Roth IRA as you can with a 401(k).
- Any Traditional 401(k) assets that are rolled into a Roth IRA are subject to taxes at the time of conversion.
- You may pay annual fees or other fees for maintaining your Roth IRA at some companies, or you may face higher investing fees, pricing, and expenses than you did with your 401(k).
- Some investments offered in a 401(k) plan may not be offered in a Roth IRA.
- Your IRA assets are generally protected from creditors only in the case of bankruptcy.
- Rolling over company stock may have negative tax implications.
Take a cash distribution
While withdrawing all of your money may seem like a good idea in the short-term, be sure you understand the consequences before you do. Money withdrawn will be taxable and subject to a mandatory 20% federal withholding rate. You may also face early withdrawal penalties.
Pros- Having the cash could be helpful if you face an extraordinary financial need.
- Taxes and penalties for taking a cash distribution may be substantial.
- Withdrawals before age 59½ may be subject to a 10% early withdrawal penalty and will be taxed as ordinary income.
- Your savings will no longer grow tax-deferred.1
- Withdrawing your money may impact whether you have enough money for retirement.
Take the next step
Take the next step
Open an IRA today
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Can I move my 401k money into an IRA?
Roll over your 401(k) to a Traditional IRA Your money can continue to grow tax-deferred. You may have access to investment choices that are not available in your former employer's 401(k) or a new employer's plan. You may be able to consolidate several retirement accounts into a single IRA to simplify management.What are the disadvantages of rolling over a 401k to an IRA?
A few cons to rolling over your accounts include:.Creditor protection risks. You may have credit and bankruptcy protections by leaving funds in a 401k as protection from creditors vary by state under IRA rules..Loan options are not available. ... .Minimum distribution requirements. ... .More fees. ... .Tax rules on withdrawals..How much does it cost to roll a 401k into an IRA?
There is usually no transfer fee charged when you roll over your 401(k) into a new tax-advantaged retirement account. Account fees for your new account might be higher than the ones for your old account. Rolling over a 401(k) to an IRA is often the way to go to reduce fees.