Steps To Rolling Over Your 401K

When you need to move your 401k account into another, the first thing that pops into your mind is how do you rollover a 401k? If you are like me you not only need to know all the information involved in doing something, but you also want to see some guidelines so you can assure you are following the correct procedures and are on the right track. It’s easy to question yourself when you are not 100% sure of what you are doing.  It is especially scary when you are dealing with your money.

So for those of you that want to know how to rollover a 401k, here are the basic steps you need to take when participating in a direct 401k rollover to a new account.

The whole concept of a 401k rollover may sound like a financial nightmare. When it comes to our money we clearly do not want to make any mistakes, but if you are aware of the necessary steps it can make the whole process a lot more calming for you.

  1. Decide: The first step is deciding where you are going to rollover your 401k. You can open a new account through a bank, brokerage account or a mutual fund. Make sure to contact a few different companies to learn about their terms and fees and get a consultation so that you can weigh your options properly. Do not jump into the water unless you know what’s out there. If you do not feel you can take this on yourself get some advice from a financial planner or tax advisor.
  2. Communicate: Next you want to talk to the company you’ve chosen to roll your retirement money into and ask of them what is required to proceed with a direct rollover. Sometimes you need to have an account already open to move forward and at times the opening of the account may take place at the same time as the rollover. Also make sure to ask them what you need to acquire from or supply to your old provider. **Ask your new provider how long this entire process should take assuming things go smoothly. I will explain why in step # 5 submitting the paperwork.
  3. Paperwork:  The next step is you want to request all necessary forms from your old plan provider. You want to get these papers in your possession as soon as possible so that you can go over them in case you have any questions regarding the forms. In some cases the old provider may require a rollover request form from your new provider. You want to make sure you are aware of all the necessary paperwork upfront so you don’t bounce back and forth and can get answers to all your questions at one time. While you are asking for the necessary forms, you want to check with your old 401k plan to find out what the procedures are so that you can try and avoid and snafus that may occur. Ensure that they have you on file as a terminated employee because if they do not it can hold up the process. **Ask your old provider how long this entire process should take assuming things go smoothly. I will explain why in step # 5 submitting the paperwork.
  4. Accuracy: Now is the important step of filling out all of the paperwork correctly. It is important that you indicate that this is a direct rollover which will ensure that the funds are paid directly to the new account. If you have any questions with the forms make sure to call the applicable company, whether it’s your new or old provider as not filling in the paperwork correctly could hold up the process. Even if it seems like a minor question like checking a box, make sure to call. There is no such thing as a dumb question when it comes to rolling over your retirement fund. If you do not feel comfortable filling out this paperwork yourself, hire a professional that can help you with this process. Spending a little money now to ensure that this process goes smoothly is a wise investment.
  5. Submit: The last thing to do is submit the appropriate forms to the correct provider, new or old. Once you’ve filed the paperwork this isn’t a set it and forget it situation. You want to make sure that you follow up with both providers to make sure that everything is moving along smoothly. Sometimes there can be an issue that is holding up the transfer and you won’t even know about it. You have to remember your old provider does not want your money to leave their hands so if there is a hiccup in the process they may not tell you as quickly as you would have liked. You have to be your own advocate in this situation to make sure all things are taken care of. Remember when I told you to ask both your old and new provider how long this process should take? Their answers should be relatively close and if they differ greatly go with your new provider’s time-line as your old provider may say longer because they do not want to part with your funds. If your providers stated that this should take about two weeks contact them halfway through to ensure everything is moving as planned or if there is any required information needed. This is not a case of no news is good news!

In most situations a check for the amount of the rollover 401k will be sent to you via snail mail. Find out how long it will be for you to receive the check so you can keep an eye out for it. If you do not receive it in a certain amount of time you will want to contact the company in case you need to put a stop on the check and have a new one issued. It is your responsibility to deposit this check into your new account. When you receive the check make sure it is filled out correctly and submit it to be deposited with the appropriate forms. Don’t take your time depositing this check as it is not something you want to forget about or worse, lose.

Remember, it is important to stay on top of this process. It is your retirement money that is at stake after all.


Donna Morgan

Donna Morgan

Crank It is where inspiration, aspiration and solution converge to make things ‘happen’. Turn on your life or turn it around and see where it takes you!

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