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Frequently Asked Question

I still have a 401k account with my former employer. I would like to transfer this account into my IRA. Can this be done? If so, are there any penalties?

Answer: Not a problem. Simply contact your former employer and ask for the necessary form(s) to complete what is generally called a “trustee-to-trustee” transfer into an IRA. Open your new IRA before the transfer so that you can provide the account information on the forms. There are no penalties, but if you allow your former employer to send the funds directly to you and not to your new IRA, they will be required to deduct and remit 20% of the total to the IRS - so don't let this happen.

This is for educational purposes only. The information provided here is intended to help you understand the general issue and does not constitute any tax, investment or legal advice. Consult your financial, tax or legal advisor regarding your own unique situation and your company's benefits representative for rules specific to your plan.


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