The first step to rolling over your 401k is to establish a traditional or Roth IRA with a financial institution. After selecting the investments for your IRA, you must then contact your plan administrator or former employer to discuss the rollover requirements and initiate the transfer of funds.
- Select an IRA
Contact brokerages with whom you feel comfortable to open a traditional or Roth IRA. Each brokerage offers unique IRA accounts through its own financial products, so it is imperative to choose the account that best satisfies your retirement needs. Be sure to discuss tax benefits and the investment strategy with the specialist before opening the IRA.
- Initiate the transfer of funds
After determining the broker and the type of IRA, contact your plan administrator or former employer to initiate the transfer of funds. Confirm that you have satisfied all your rollover requirements before requesting the transfer. Once confirmed, reference both your name and your new IRA account number, and request to have the funds directly rolled over.
- Select your investments and manage your savings
Create an investment strategy for your new IRA. Determine how you want your funds allocated and what investments are most suitable to achieve your goals. Your brokers then allocates funds according to your investment choices. Keep an eye on your investments, but refrain from actively trading to avoid fees and commissions.