Rollover IRA (401k to IRA) - Patelco Credit Union

Why rolling over your 401(k) to an IRA is a good choice

When you leave a job, you don’t have to leave your employer-sponsored 401(k) retirement plan behind. For most people rolling over a 401(k) into an IRA is a great option. When you roll over to an IRA, you can maintain tax-advantaged status of your retirement savings when you follow the IRA rules.

Product Benefits

Save money for retirement

Withdrawals are penalty-free once IRA owner reaches 59 1/2

Cut your tax bill

Maintain tax-deferred status of your retirement savings

Deposit products held in IRAs offer:

Guaranteed return on principal with automatic renewal at maturity; Federally insured up to $250,000

Investment products can be held in an IRA

Talk to a CFS Financial Advisor available through CUSO Financial Services, L.P. ("CFS") about your options²

IRA Calculator

Frequently Asked Questions

When you change jobs or retire and have savings left in your former employer's retirement plan, you typically have several options when deciding what to do with your money.
If you opt to move your money into an IRA, you'll determine if a traditional IRA or Roth IRA is right for you. This generally depends on the type of money in your original account and your tax situation. It's common to roll pre-tax money into a traditional IRA and post-tax money into a Roth IRA.
You can usually open your IRA online, over the phone, in person, or by mail and then fund it by requesting to transfer money from your former employer's retirement plan to your new account.
You can open and fund one without employer participation
Contributions/earnings are tax-deferred until retirement.
Depending on your plan participation and income, you may benefit from tax deductions.
Your funds are always available, generally not true of employer plans.
There's no minimum contribution.
The main difference between them is when you pay taxes.
A traditional IRA is tax deferred. This means that you can contribute money before it's taxed, and you don't owe taxes on those contributions or your earnings until you withdraw the money. It's likely that you will be earning less when you begin to withdraw from your IRA, which means that you may end up being in a lower tax bracket and paying less overall in taxes. If you qualify, you may also be able to deduct your contributions to your IRA on your federal income tax return, which can lower how much you will need to pay.
A Roth IRA is not tax deferred, which means you owe taxes when you contribute the money to the account. But that means you won't have to worry about paying them later and your contribution can grow tax-free. Withdrawals of contributions and earnings are tax free if your account has been open at least five years, and you’re at least 59 and a half.
If you want to make a withdrawal before you're 59 and a half, you'll have to pay a 10% tax penalty. On the other hand, you must begin to take required minimum distributions (RMDs) after you turn 70 and a half (or 72 if you were born after June 30, 1949) if you have a traditional IRA. This is a minimum amount that you're required to withdraw each year. RMDs are taxed as ordinary income. If you have a Roth IRA, you won't have an RMD.

We’ll help you roll over your 401(k) into a IRA

We want to help you with your Rollover IRA. Schedule a complimentary meeting with any of our experienced CUSO Financial Services, L.P. ("CFS") financial advisors. We’ll talk with you about your goals and interests, find out where you are financially, and get you started on a path that works for you.

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How much do I need to retire?

To learn more, watch this video from Jane Krueger, CFP, Financial Advisor, CUSO Financial Services, L.P. at Patelco Credit Union.

All roads lead to retirement and saving for this major life event starts as soon as you're working. With tax incentives that we get from the IRS for saving for your own retirement, it's easy. It's cheaper too, if you invest in some solid stock funds and let the global economic growth build your assets over your lifetime. As people near retirement, they almost intuitively want to move to safe and conservative investments. I get it, but I always have to remind clients that at age 65, you could be 20 or 30 years away from your long-term goals.

Investments in money market savings and CDs have never kept pace with inflation and taxes. In fact, every 20 years, our money's worth about half as much or has about half of the purchasing power. Luckily, there are products that offer principal protection and potential growth from market indexes.

A good financial advisor can help you invest, accumulate, consolidate and eventually plan for the distribution of your retirement assets to you.

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Roll over your 401(k) and take greater control of your retirement savings

A traditional IRA can be a great way to save for retirement since potential earnings grow tax deferred, and your contributions may be tax deductible.

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Recommended Reading

Retirement Planning Guide

Learn About IRAs

¹ Consult tax advisor about IRA tax advantages.

² Non-deposit investment products and services are offered through CUSO Financial Services, L.P. ("CFS"), a registered broker-dealer (Member FINRA/SIPC) and SEC Registered Investment Advisor. Products offered through CFS: are not NCUA/NCUSIF or otherwise federally insured, are not guarantees or obligations of the credit union, and may involve investment risk including possible loss of principal. Investment Representatives are registered through CFS. Patelco Credit Union has contracted with CFS to make non-deposit investment products and services available to credit union members.

Financial Advisors are registered to conduct securities business and licensed to conduct insurance business in limited states. Response to, or contact with, residents of other states will be made only upon compliance with applicable licensing and registration requirements. The information in this website is for U.S. residents only and does not constitute an offer to sell, or a solicitation of an offer to purchase brokerage services to persons outside of the United States.

Certified Financial Planner Board of Standards Inc. owns the certification marks CFP^®, Certified Financial Planner™ and federally registered CFP (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements.

Rollover IRA

Income Requirements

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