Quote:
Originally Posted by Porsche-O-Phile
At first glance this sounds like a good option for me - I have a bunch of money (well, not as much as I did a few months ago :grr: ) in a former employer's 401k. Up to now I've just left it alone rather than going through the hassle of rolling it over. I'm thinking that doing an "indirect rollover" might be useful right now - it would give me some emergency liquidity if I need it within the coming 60 days and if not, I can simply put it into a fund of my choice after that time.
What do you guys think? What are the restrictions? Tax implications? If I use, say $1,000 to pay off bills and put the rest into another investment later, do I just pay the tax penalty on the $1,000? What investment vehicles are available for use to reinvest? Money markets? Currency trading? Foreign stocks & options? Or does it have to be a "conventional" 401k or Roth IRA (with their fees)?
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Do you have 20% of the value of your current 401K in liquid cash right now? Do you have firm plans to have a new 401K in place an active within 60 days?
If no to either, then don't get an indirect. In fact, don't get one at all, I see zero reason for getting one except for certain extreme cases. It's a quick way to take money out of your bank (LOTS of money!) and give the feds a large interest free loan.