401(k) Rollovers

401(k) Rollovers: Your Path to Financial Security 

At Beacon Financial Group, we understand that managing your retirement savings can be overwhelming. We're here to be your advocate and your coach, guiding you through the complexities of 401(k) rollovers. We will walk you through everything you need to know about rolling over your 401(k) into an IRA, helping you make informed decisions that align with your long-term financial goals.

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What is a 401(k) Rollover?

A 401(k) rollover is the process of transferring the funds from your 401(k) account into an IRA (Individual Retirement Account), another retirement plan, or another employer's 401(k) plan. This move can provide you with more investment options, potentially lower fees, and greater control over your retirement savings. Most people think about a rollover to an IRA when they are changing jobs or retiring.

Why Consider a 401(k) Rollover?

  1. Investment Flexibility: Unlike 401(k) plans, which are limited to the investment options provided by your employer, IRAs offer a wider range of investment choices, including stocks, bonds, mutual funds, and ETFs.
  2. Lower Fees: IRAs often have lower administrative fees compared to 401(k) plans, allowing you to save more for your retirement.
  3.  Consolidation: Rolling over your 401(k) can help you consolidate your retirement accounts, making it easier to manage and monitor your investments.

Types of 401k Rollovers

  1. Traditional IRA: A traditional IRA allows you to transfer your 401(k) funds without incurring immediate taxes. Your funds continue to grow tax-deferred until you withdraw them during retirement.

  2. Roth IRA: Rolling over your 401(k) to a Roth IRA involves paying taxes on the amount transferred, but your funds will grow tax-free, and you won't pay taxes on qualified withdrawals in retirement.

  3. Another Employer's 401(k) Plan: If you have started a new job, you may have the option to roll over your old 401(k) into your new employer's 401(k) plan. This option can help you keep all your retirement savings in one place, making it easier to manage.

Steps to Roll Over Your 401(k)

  1. Evaluate Your Options: Decide whether a Traditional IRA, a Roth IRA, or another employer's 401(k) plan is best for your financial situation.

  2. Open an IRA Account or Check Your New Employer's Plan: If you don't already have an IRA, you'll need to open one with a financial institution that meets your needs. Alternatively, check with your new employer about their 401(k) plan and whether it accepts rollovers.

  3. Initiate the Rollover: Contact your 401(k) plan administrator to start the rollover process. You can choose a direct rollover, where the funds are transferred directly to your new IRA or employer's plan, or an indirect rollover, where you receive the funds and must deposit them into the new account within 60 days.

  4. Choose Your Investments: Once the funds are in your new account, you can select the investments that best align with your retirement goals.

Frequently Asked Questions

Q What is the difference between a 401(k) and a Traditional IRA?


A 401(k) is an employer-sponsored retirement plan, while a Traditional IRA is an individual retirement account that offers more investment options and often lower fees.

Q Can I roll over my 401k to a Roth IRA?


Yes, you can roll over your 401(k) into a Roth IRA, but you will need to pay taxes on the amount you convert. However, future growth and withdrawals in retirement will be tax-free.

Q What happens if I miss the 60-day deadline for an indirect rollover?


If you miss the 60-day deadline, the amount will be treated as a taxable distribution, and you may also be subject to an early withdrawal penalty if you are under 59½.

Q Is an IRA or 401k better?


An IRA offers more investment options and potentially lower fees, while a 401(k) allows for higher contribution limits and often includes employer matching; the best choice depends on your individual financial situation and retirement goals.

Q Is a 401k a Traditional IRA?


No, a 401(k) is an employer-sponsored retirement plan, whereas a Traditional IRA is an individual retirement account; both offer tax-deferred growth but have different contribution limits and rules.

Thinking About a Rollover?

At Beacon Financial Group, our goal is to provide you with the knowledge and support you need to make the best decisions for your retirement. Rolling over your 401(k) can be a strategic move to enhance your financial future, and we are here to guide you every step of the way. Contact us today to learn more about how we can help you achieve peace of mind and financial security through a 401(k) rollover.

Come Visit Us!

(972) 726-9888

17300 Preston Road, Suite 120

Dallas, TX 75252

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Securities offered through Kestra Investment Services, LLC, (Kestra IS), member FINRA/SIPC. Investment Advisory Services offered through Kestra Advisory Services, LLC (Kestra AS), an affiliate of Kestra IS or Beacon Financial Group. Beacon Financial Group is affiliated with Kestra IS and Kestra AS.

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