Rollover from 401(k) to another 401(k)

[Guest LMcP]

I recently started a new job and wanted to rollover my 401(k) to the new employers plan. However, after receiving the distribution check from my old plan and sending it the new plan administrator, I found out that the new employer has elected not to roll 401(k) funds into their 401(k), but rather into the pension fund. I had planned to take a loan as a downpayment on a home, since I have accumulated about $50,000, and would be eligible to take up to $25,000 for a downpayment. Unfortunately, I don't qualify for a ROTH IRA. Any advice for other ways to reapply my 401(k) so that I can use it or ways to convince my current employer to change the plan?

[stephen]

Roll your 401(k) into a regular IRA. Then you will still be able to take out the money for your downpayment as you desired.

[Wessex]

Keep in mind that you must make the rollover within 60 days of the date you received the distribution. Was the distribution check payable to you or to your new employer's plan? If the latter, you may have problems getting it reissued and should act as promptly as possible. Good luck!

[This message has been edited by Wessex (edited 10-15-98).]

[Guest Dave Z]

You should also keep in mind that the amounts you withdraw will be subject to income tax and may be subject to a 10% premature distribution excise tax unless the amount is considered to be a "qualified first-time homebuyer distribution." If you are over age 59 1/2., the excise tax does not apply.