IRA rollover?

[Guest jcrum00]

I'm considering starting an IRA for my husband who never stays at a job long enough to qualify for the 401K benefit (no he's not a louse, he leaves by choice ). But what happens if he actually does stay at a job for longer than 4 months and the company has a good 401K plan? Can I transfer the balance of the IRA to the company 401K without penalty?? Or is the transfer considered a withdrawal and therefore taxed??

Enquiring minds (well, just me) want to know!

TIA,

Jennifer

[Guest jusducki]

Should this happen, he'd have to first ask the 401(k) Plan Trustee if the Plan allows for IRA rollovers. Some do, some do not. Many, many plans allows for rollovers of "old" qualifed money, meaning funds from previous employers profit sharing or 401(k) plans, but allowing for IRA transfers is not as common....at least with the qualified plans I am familiar with...as a thought, if your husband meets the eligiblity requirements of joining the 401(k) such as six or twleve months of employement, etc. he could join the plan, fund it rather than his IRA and then, should he choose to leave, transfer his 401(k) funds into his IRA, with no tax consequences as long as the transfer is done via a Trustee to Trustee transfer. All 401(k) deferrals are 100% vested so is not a risk that he'd "lose" his deferrals (other than the investment risk should his account decrease due to his investment selection return).

[Guest jcrum00]

Thanks for the info!!