401k Rollover for Job Seekers

Did you just leave your previous employer? Making a career transition is never easy. Allgen is in the business of helping you make major transitions a pleasurable experience.

What are the necessary steps to rollover a 401k?
Allgen is happy to walk you through this process to help you take control of your retirement assets. Typically the process takes 1-2 weeks.

Step 1: Open up an IRA (Individual Retirement Account) by filling out an IRA application.

Step 2: Call your 401k and ask tell them that you want to rollover your 401k into an IRA. Proceed by asking them to send a check payable to the company you opened your IRA with. At Allgen we manage our clients accounts through a Charles Schwab account. So if you were to open an account with Allgen you would call up your 401k and tell them you want to rollover your 401k into an IRA and you would request your check be made out to Charles Schwab & Co., Inc. FBO (your name). By making the check out to Charles Schwab you avoid any tax consequence.

Step 3: Receive personalized investment advice from an Allgen Financial Advisor

Step 4: Deposit check into your IRA

What are the most common mistakes made?
(1) Cashing out and potentially creating a huge tax consequence. You're not only taxed on the money you take out but you're also charged a penalty if you have not yet reached the age of retirement.

(2) Not rolling it over and letting it sit idle without knowing where the money is invested.

( 3) Not directly rolling over the funds. When you rollover, you can have the 401k plan provider write a check directly to your new brokerage, called a trustee-to-trustee rollover; or they can cut you a check and you can write a new one. The second way, the check made out n your name, is dangerous because you have sixty days to deposit the funds or it’s considered a cashout. One trip through the postal service is certainly better than two trips, especially if the two trips have a time limit with a hugely negative downside.

When should someone consider rolling over their 401k?
Immediately after you are no longer employed by your previous employer

When transferring a 401k to an IRA, does it matter how much is invested in the 401k?
No, it does not matter how much is in a 401k when rolling it over into an IRA

What are the maximum amount of contributions allowable?

It is important to rollover your 401k because it gives you more control over your investments. A typical 401k has on average 10-20 investments to choose from. In a rollover IRA, the options are endless and range from thousands of mutual funds, to individual stocks and even alternative investments (Private REITs, Oil Interests and hedge funds). Another benefit to rolling over your 401k into a rollover IRA is the option to have a professional money manager manage your investments.