When you leave a job you not only say good-bye to co-workers, your computer and that familiar cubicle, you may also be leaving behind the company retirement plan. But like the pictures of your family and the Nerf dart board on the wall, you can take your retirement savings with you when you leave and transfer it into an IRA. Do it right and you’ll avoid tax penalties and keep your money safe for the day when you say good-bye to full-time employment altogether.
Contact the financial institution where you want to open your IRA. Or, if you have an existing IRA, contact the company that handles that account. Tell them you want to transfer funds from a retirement account you had with your former employer into your IRA.
Complete the application to open a new IRA, if necessary. Designate that the IRA will be funded with a transfer.
Provide your IRA manager with information about your retirement account – the name of the company that manages it, your account number and your Social Security number.
Contact the company that manages your old retirement plan and notify them that you want the funds transferred to your IRA. Complete the paperwork for the transfer, providing the name of the IRA manager and your account number.
Wait for verification that the money has been transferred. Depending on the company, this could take several weeks. After the transfer, you may have the option of moving the funds into different investment accounts within your IRA.
- If, instead of a direct transfer, you elect to receive a check for the retirement account funds, you must deposit that check in your IRA within 60 days to avoid a tax penalty for early withdrawal of funds.
Cynthia Myers is the author of numerous novels and her nonfiction work has appeared in publications ranging from "Historic Traveler" to "Texas Highways" to "Medical Practice Management." She has a degree in economics from Sam Houston State University.