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Apr 20 2009 12:00AM


I am 68 years old. Can I roll over my 401(k) to an IRA, and choose the fund or stock in which to invest?  If so, what are the tax implications?


"Yes," said FPA member, Stephen Csenge, AIF, CFP® of Csenge Advisory Group. "You can roll over your 401(k) into an IRA and, in fact, that is often the more advisable approach just for the reason you bring up. Within most 401(k)s there is a limited inventory of investment options.  However, once the monies are rolled into an IRA, you now have access to the full universe of mutual funds, stocks, bonds as well as other investment options. This can provide much more ability to manage your risk and return profile.

"As long as you do a direct custodian-to-custodian transfer there are no tax implications in moving the monies from the 401(k) to the IRA.  This simply requires that the "rollover" distribution is made directly to the IRA custodian and not to you. This is often accomplished by having the distribution check made out to the new custodian for the benefit of the "named owner" IRA.  It is fine to have the check sent to you, as long as it is not payable to you. The 401(k) distribution request forms should explain this and provide for this as one of the "rollover" options."

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