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Why is July Such a Popular Month for 401k Rollovers?


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July is a busy month for ... for multiple reasons. Firstly, although tax season ends on or before April 15 for many investors, it runs through June for others. The Internal Revenue Service allows investors to request an extension until mid-June, and many employees and owners of small businesses take advantage of the extension to put off taxes until the middle of the year. Many doctors, for example, close their respective practices for the entire month of July after working non-stop from January through June and getting their taxes done. It’s during this time that doctors and other small business owners can focus on evaluating their portfolios, and this often leads to the decision to roll over 401k plans.

July is also a busy month ... because many teachers and government employees retire at, or close to, the end of June each year. When someone with a 403b retires, they often decide to immediately roll their 403b plan over to a self-directed Individual Retirement Account (IRA). This provides the investor with greater financial flexibility, more retirement account investment options, and lower fees.

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All individual taxpayers get an automatic 6 month extension to Oct 15 by filing form 4868. There is an automatic mid june extension for US citizens/resident aliens who live outside the US or PR and whose main place of business or post of duty is outside US or PR or are outside the US/PR on military duty. There is no 60 day extension for investors instead of filing form 4868.

I don't know where this guy gets his information.


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