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(980) 245 4757
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IRA’S & 401K Rollovers

Client Centered

*Megan is a 37-year-old aspiring architect. Since graduating from NC State, she has bounced around a number of firms in her native Charlotte. Last year she moved to a new firm in Matthews, and now feels like she has found a ‘home’, but…

She’s overwhelmed with the monthly avalanche of statements she receives in the mail from the 401k plan accounts she holds with all her previous employers.

In total, she has already accumulated over $150,000 in retirement savings, but the money is spread across 5 different accounts, one with her current employer. Megan didn’t think much of opening a new retirement account with each of her employers, but now the sheer number of accounts seems overwhelming. Megan has also realized that nobody is actively managing her investments, which means she’s probably not benefiting as much as she could.

She’s not the only one who has multiple retirement accounts. When employees are invited to participate in their employer’s 401(k) and rewarded with matching contributions, they are happy to set up retirement savings for their future. The problem is those retirement accounts stay with the employer even when you leave your job. For Megan, this meant she ended up with 4 inactive retirement accounts she could no longer contribute to.

When you have multiple retirement accounts, it becomes more difficult to manage them all. Another disadvantage is that you can’t contribute to a 401(k) from your previous employer.

The 401(k) rollover rules allow you to rollover your retirement account into another qualified retirement account without losing the tax-deferred status of your investments. Your 401(k) rollover options include a 401(k) rollover to an IRA and a 401(k) rollover to a new employer. You also have the option to cash out your retirement savings, but you will pay taxes and early withdrawal penalties. Cashing out also sets you back on your retirement savings goals, which is why we recommend one of the other 401(k) rollover options.

Megan came to FairWay Financial looking for help in getting better control of her various retirement accounts. She always had the option to keep the accounts as they are, but it is time-consuming to keep track of multiple accounts. Trying to manage investment choices within five different accounts would never simplify her life, so we proposed alternatives to remedy that situation. 

In the end, we settled on a consolidation solution that made her feel comfortable. We opened up a new IRA for her, which gave her more control over her investment options. Then we proceeded to rollover her other accounts into the new IRA.


You must follow the 401(k) rollover rules to keep the status of your tax-deferred investments and avoid hefty penalties and taxes. 

We helped Megan make phone calls to the various firms who held the old accounts and provided instructions to move that money into the new IRA account for her. We made sure to be specific in our language, avoiding any unwanted penalties or complications. Two of the firms insisted on sending paperwork to close those accounts and we made sure Megan completed those correctly. She was able to rollover all her retirements into her new account and avoid penalties and taxes.

We will manage Megan’s new IRA for her and also help her optimize her contributions to her current 401(k) plan. This allows her to maximize her retirement savings while selecting the types of investments that will help her pursue her financial goals. 

It’s important to work with a financial advisor on your 401(k) rollover to ensure your transition goes just as smoothly. There’s no limit to the amount of money you can rollover, but you can typically only rollover the funds in your account once per calendar year. If you choose an indirect rollover, where you receive a check or money in the back, you only have 60 days to transfer the entire balance into a new qualified retirement account.

We helped Megan make phone calls to the various firms who held the old accounts and provided instructions to move that money into the new IRA account for her. We made sure to be specific in our language, avoiding any unwanted penalties or complications. Two of the firms insisted on sending paperwork to close those accounts and we made sure Megan completed those correctly. She was able to rollover all her retirements into her new account and avoid penalties and taxes.

We will manage Megan’s new IRA for her and also help her optimize her contributions to her current 401(k) plan. This allows her to maximize her retirement savings while selecting the types of investments that will help her pursue her financial goals. 

It’s important to work with a financial advisor on your 401(k) rollover to ensure your transition goes just as smoothly. There’s no limit to the amount of money you can rollover, but you can typically only rollover the funds in your account once per calendar year. If you choose an indirect rollover, where you receive a check or money in the back, you only have 60 days to transfer the entire balance into a new qualified retirement account. 

Working with a financial advisor can help you move money efficiently. It allows you to avoid taxes and penalties and keep your investments in a tax-deferred account.

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*The is a hypothetical example of how Fairway Financial interacts with the community.
This is a fictitious creation by the author to demonstrate our services. None of the names or images belong to actual clients, accounts or relationships.

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