- Introduction
- Income Tax Considerations
- Beware–the 10% Early Withdrawal Penalty Tax
- Rollover into a Traditional IRA or Other Retirement Plan
- Conduit IRAs
- Summary of Distribution Options When You Leave Your Company
If you plan on rolling your 401(k) distribution into another retirement plan, but can't do it right away, it is highly advisable to use a "conduit IRA" to hold the money in the interim. A conduit IRA is a traditional IRA set up exclusively to hold your 401(k) distribution for a short period of time until you are able to roll it into your new employer's 401(k) plan or other retirement plan. You must not make any new or additional contributions to this IRA or commingle it with any other retirement money. If you do, you will not be eligible for the 10-year averaging treatment available to plan participants born before 1936.
Securities and advisory services are offered through LPL Financial (LPL), a registered investment advisor and broker-dealer (member FINRA/SIPC). Insurance products are offered through LPL or its licensed affiliates. Franklin Mint Federal Credit Union and Mint Wealth Advisors are not registered as a broker-dealer or investment advisor. Registered representatives of LPL offer products and services using Mint Wealth Advisors, and may also be employees of Franklin Mint Federal Credit Union. These products and services are being offered through LPL or its affiliates, which are separate entities from, and not affiliates of, Franklin Mint Federal Credit Union or Mint Wealth Advisors. Securities and insurance offered through LPL or its affiliates are:
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