How to roll over a Vanguard 401(k) | Capitalize (2024)

FAQs

How to roll over a Vanguard 401(k) | Capitalize? ›

Note: If the check is made payable to Vanguard, do not endorse it. If the check is made payable to you instead of Vanguard, you should endorse it, and mail it to us within 60 days. To avoid owing taxes or penalties on early withdrawals, check with your tax advisor.

Note: If the check is made payable to Vanguard, do not endorse it. If the check is made payable to you instead of Vanguard, you should endorse it, and mail it to us within 60 days. To avoid owing taxes or penalties on early withdrawals, check with your tax advisor.

Rolling over your 401(k), whether into an IRA or your new company plan, may take a bit of administrative work, but it isn't difficult to do. In both cases, you reach out to the new plan provider or the investment firm you plan to work with and let them know you will be rolling over assets from an old plan.

A Vanguard specialist can help you move your money into a rollover IRA. Call 800-310-7590 Monday through Friday from 8:30 a.m. to 9 p.m., Eastern time. It's a smart way to help keep your retirement assets in position to grow tax-deferred, with even greater investment choices available.

Note: You can roll over your assets to a new or an existing Vanguard account. Need a letter of acceptance? You'll be able to create and print a letter of acceptance during our online rollover process. Note: You may not be eligible to roll over a plan account that you're still contributing to.

The short answer is yes – you can roll over your 401(k) while still employed at the same place. Leaving an employer isn't the only time you can move your 401(k) savings. Sometimes it makes sense to roll over your 401(k) assets while you continue to work and make further contributions to your company plan.

Once you reach 59½, you can take distributions from your 401(k) plan without being subject to the 10% penalty. However, that doesn't mean there are no consequences. All withdrawals from your 401(k), even those taken after age 59½, are subject to ordinary income taxes.

Withdrawals of your traditional IRA contributions before age 59½ will result in regular income tax on the taxable amount of your withdrawal plus a 10% federal penalty tax —generally the entire amount—unless you qualify for an exception.

Press “Select an account” and choose the IRA that you want to deposit your rollover check into. Press “Select a funding source” and then choose “Mobile check”. On the back of your check write “For Electronic Deposit only at Vanguard” (no need to endorse or sign your name).

How do I avoid 20% tax on my 401k withdrawal? ›

Deferring Social Security payments, rolling over old 401(k)s, setting up IRAs to avoid the mandatory 20% federal income tax, and keeping your capital gains taxes low are among the best strategies for reducing taxes on your 401(k) withdrawal.

You lose out on the tax advantages of the account.

If you don't get the money into your retirement account in time, you won't get the tax benefits, and your contributions are limited to only so much each year. “This may be a permanent loss of the ability to earmark these funds for retirement,” says Ouellette.

While Fidelity wins out overall, Vanguard is the best option for retirement savers. Its platform offers tools and education focused specifically on retirement planning.

Any Traditional 401(k) assets that are rolled into a Roth IRA are subject to taxes at the time of conversion. You may pay annual fees or other fees for maintaining your Roth IRA at some companies, or you may face higher investing fees, pricing, and expenses than you did with your 401(k).

Transferring Your 401(k) to Your Bank Account

That's typically an option when you stop working, but be aware that moving money to your checking or savings account may be considered a taxable distribution. As a result, you could owe income taxes, additional penalty taxes, and other complications could arise.

Make sure you have the username, password, and an account statement from your previous firm. You may need these to complete your rollover. To start your rollover, select the Open an account option on investor.vanguard.com. Under How can we get you started?, choose Roll over an employer plan, such as a 401(k).

You can cash out your entire retirement plan balance when you leave an employer.

A rollover is when you move money from an employer-sponsored plan, such as a 401(k) or 403(b) account, into an employer-sponsored plan held at Vanguard or a Vanguard IRA®.