@mariahakinbi: the third thing you can do….. 3️⃣ ROTH CONVERSION: you could convert the Rollover IRA to a Roth IRA. you'd pay income tax on the entire balance in the year that you do the conversion. But then you’d never pay taxes on that money ever agin.this is something that makes more senses in a low income year, like a sabbatical or a career change. but it's a big tax bill in a normal year, so it's a decision that takes some thought/planning. 🌟 MORE ABOUT A ROLLOVER IRA: rolling over doesn't count against your contribution limit. if you moved $40,000 into a rollover IRA this year, you can still put in your full $7,500 on top of it. those are separate buckets! 🗣️ ALWAYS DO A DIRECT TRANSFER. if the money moves institution to institution, there's no deadline. if they cut you a check from the 401k, you have 60 days to get it into the new account or it counts as a distribution, which means there will be taxes and a 10% penalty if you are under 59.5 y/o. Also the 401k typically withholds 20% on those checks and you have to replace that out of pocket. WHY KEEP THE MONEY IN A 401k??? most employer plans have federal creditor protection. In the case of bankruptcy, IRA protection varies by state. Bottle: @Owala #rolloverira #401k #rothira #investingforbeginners #PersonalFinance

mariahakinbi

Open In TikTok:

Region: US

Wednesday 26 August 2026 23:12:30 GMT