Your 401(k) When Switching Jobs
- Introduction
- Income Tax Considerations
- Beware–the 10% Early Withdrawal Penalty Tax
- Rollover into a Traditional IRA or Other Retirement Plan
- Conduit IRAs
- Summary of Distribution Options When You Leave Your Company
Conduit IRAs
If you plan on rolling your 401(k) distribution into another retirement plan, but can't do it right away, it is highly advisable to use a "conduit IRA" to hold the money in the interim. A conduit IRA is a traditional IRA set up exclusively to hold your 401(k) distribution for a short period of time until you are able to roll it into your new employer's 401(k) plan or other retirement plan. You must not make any new or additional contributions to this IRA or commingle it with any other retirement money. If you do, you will not be eligible for the 10-year averaging treatment available to plan participants born before 1936.
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Important information about procedures for opening a new account
To help the government fight the funding of Terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify and record information that identifies each person who opens an account.
What this means to you: When you open an account, we will ask you for your name, address, date of birth and other information that will allow us to identify you. We may also ask to see your driver's license or other identifying documents.
Investment products are offered through Osaic Institutions, Inc., Member FINRA/SIPC. Insurance products offered through Osaic Institutions, Inc.