Normally, the 401k to IRA transition is made when leaving a job or retiring. The nice thing about this transition is that it can be done at any time. There is no one year minimum time requirement to stay in the 401k if you have left the company it is connected with. However, the IRA rollover account will have to house your funds for a minimum of 1 year, so if you are changing from one company to another, you may want to consider a direct 401k to 401k rollover.

The single most important thing when moving from a 401k to IRA is that your funds stay tax deferred and that they are quickly reinvested so that there is little to no time that they are not working for you and building for your future retirement. Compounding interest is what will make your retirement funds grow exponentially, especially during the last few years before retirement. So, any time that your funds are not being put to work to grow, you not only lose out on the immediate gains, but also the compound growth in the future.

There are many benefits to completing a 401k rollover from your past employer, especially if you have several different accounts from more than one past employer.

1.The rollover will allow to you consolidate all of your accounts, so you are not having to search through many separate companies when the time comes that you need access to the retirement funds you have earned.

2.Your retirement funds are more secure. In the future a previous company could merge, go bankrupt, or somehow mishandle their 401k program. By completing a 401k rollover to IRA rollover account you will already have your funds and not have to worry the previous employer's financial position.

3.With an IRA rollover account you have personal control which will allow you to diversify your retirement funds per your needs. It can be rolled into a future employer's 401k, set up on separate IRA's for different investment purposes, or all past retirement accounts can be consolidated into one IRA rollover account to keep it simple.

4.By having your retirement funds consolidated, they will also be accessible if for some reason an emergency occurs. Keep in mind that any funds that are withdrawn will be subject to taxes and penalties for early withdrawal. It is never recommended to remove retirement funds from your IRA unless it is an absolute emergency.

The 401k rollover to IRA process is an important tool in your retirement success as you move jobs and plan for your future. We hope this information has been helpful in planning for your future 401k rollover.