Rollovers: Move Your Assets – Napkin Finance

Move Your Assets

November 6, 2019

What’s a rollover?

A rollover is when you move money from one retirement account into another—like if you decide to transfer your 401(k) from your old job into an Individual Retirement Account (IRA) you’ve set up.

Retirement accounts are supposed to be used for retirement—and they get special tax benefits to try to encourage people to save for retirement. But that means you can’t just shift money in and out of your retirement accounts whenever you want. Instead, transferring a retirement account gets its own special process: a rollover.

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Fun facts on retirement

  • Although rolling money from a 401(k) into an IRA when you retire can be a simple process, more and more retirees are choosing to leave their money in their former employer’s plan instead—possibly because large 401(k) plans can offer competitive fees.
  • Know those “beneficiary designation” forms you’re supposed to fill out when you open a new retirement account? You should really get on those. Otherwise, your random IRA could end up in a multi-year, nasty court battle—as one Massachusetts man’s $276,000 IRA recently did.
  • FIRE shmyer. Turns out early retirement isn’t all sunshine and rainbows—in fact, retiring early can speed up how quickly your brain declines.
  • That said—for seniors who do keep working—the main reason they do so isn’t because they want to be able to keep killing it on the Sunday crossword. It’s because they need the money.
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