Steps to Roll Over a 401(k)

Steps to Roll Over a 401(k)

Most of us know that a 401(k) is a type of retirement savings account that is set up and managed by your employer or a firm hired by your employer. Since 401(k)s came into existence in 1978, they have become one of the most popular ways for many Americans to save for retirement. Many employers will offer a matching percentage as well, which is another reason many Americans love them.

Anchor Wealth Management is a financial services firm whose advisors specialize in helping people plan their financial future, meet their retirement goals, and take action steps so that they don’t outlive their money. Our knowledgeable and down-to-earth financial advisors love to teach people about the different options available to them to meet their short-term and their long-term financial planning goals. Below, we’ll take a quick look at what a 401(k) is and then tell you how to roll over one. Contact either our Rockford or Lanark office today!

What is a 401(k)?

A 401(k) is a qualified retirement plan, which simply means that it qualifies for special tax benefits under the IRS. As the owner of the 401(k), you make contributions (which usually come directly from your paycheck) into your 401(k), and your employer can choose to match some or all of it. A 401(k) does have contribution limits, and you can choose your investment options. As a retirement plan, there are also rules for making withdrawals associated with your 401(k). It’s best to make an appointment with your local financial advisor, such as the advisor at Anchor Wealth Management, to discuss these matters more in depth since every person’s situation is a bit different.


A roll over is when you transfer money from one retirement account to another retirement account. The reasons to move your retirement savings into a different plan include:

  • You’ve switched employers and want to keep all of your money in one place
  • You want to switch to a different type of retirement savings plan, for example, switching from a 401k to a Roth IRA
  • You want more investment options than your current 401(k) is offering
  • You want lower fees and costs
  • You want estate planning advantages
  • You want better access and more control


  1. Decide where you want your 401(k) money to go. There are hundreds of retirement savings options for your 401(k) money. Almost every financial institution offers some type of IRA or retirement investment account.
  2. Decide what type of investments you want. Do you want it in a traditional or a Roth IRA? Do you want to invest in mutual funds, exchange-traded funds (ETFs), etc? Do you want it back in a 401(k)?
  3. Open the new 401(k) account. Once you’ve decided what type of retirement account, you open up the new one.
  4. Move your 401(k) money from the old one. Now that you have the new one, you ask the holder of your old one to make a direct rollover (meaning they cut the check directly to your new 401(k) holder so you don’t touch the money, thereby avoiding tax implications). You have 60 days once you take the money out of your old 401(k) to get it deposited into your new one.
  5. That’s it!

Rolling over your 401(k) is actually quite simple. You can do an indirect rollover, but our financial advisors at Anchor Wealth Management do not recommend this. This is where the check is cut directly to you, and if you miss the 60 day deadline to put that money back into a retirement fund, you could be hit with an unwanted tax bill.


Anchor Wealth Management’s financial advisors offer comprehensive financial planning that encompasses all aspects of your finances, from helping you with savings and budgeting plans to forming plans for college savings, retirement savings, and long-term care planning.

At Anchor Wealth Management, we begin with a complimentary consultation where we spend some time getting to know you, your goals, your aspirations, and where you want to be when you retire financially. In our first meeting, we’ll also go over our mission and vision and tell you how we can help. Once you decide to partner with us as your financial advisors, we’ll get down to the nitty-gritty details and help you form a comprehensive plan. We’ll then help keep you accountable as we move forward and help you to stay the course to meet your financial goals. Our door is always open, and if you ever have a question, please don’t hesitate to ask.

Anchor Wealth Management offers two locations to better serve you — one in Rockford and Lanark. Call today to begin your journey to financial independence!