401k rollover

[Guest mlgordon]

I would like to rollover my 401k from previous employer into a roth IRA. i am have been told that I must roll it into a traditional IRA and then convert it into a roth ira. Does this sound correct? Thank you.

[Guest David Hammond SRS]

Rollovers from Qualified Plans such as a 401(k)Plans CANNOT go directly into a ROTH IRA. Arrange for a "Direct Rollover" from the 401(k) Plan into a Traditional IRA and the CONVERT the Traditional IRA into a ROTH IRA.

WHY? The Tax-deferred 401(k) monies cannot be rolled over into the potentially Tax-Free ROTH without first

passing through the Traditional IRA.

The conversion and the income taxes that will result are the "cost of admission" into the ROTH for these monies.

[Guest wberta]

But if my 401K is post-tax I can rollover directly to a Roth, can't I?

[Wessex]

Post-tax contributions made to a 401(k) plan are not eligible for rollover. The earnings on the post-tax contributions would generally be eligible for rollover and, as described in the previous message, must go first to a traditional IRA before conversion to a Roth IRA.

[Guest williamg]

Now that I know to transfer my 401K to IRA and then Roth IRA, do you recommend going to the online trading places such as Datek or DLJDirect?

If not, any suggestions or things to look out for?

Appreciate it.

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