Navigation 401K IRA Rollover Calculator.
Should You Take a 401K Lump Sum Distribution or Roll it Over Into an IRA?

401(k) IRA Rollover Calculator

This calculator will compare the consequences of taking a lump-sum distribution of your 401(k) or IRA versus continuing to save it in (or roll it into) a tax-deferred account until retirement.

Assumptions: Contributions to plans are made before taxes, federal and state income tax rates are the same at retirement age, and the plan withdrawels are qualified withdrawels under the IRS rules.

Enter Your Age, Anticipated Returns & Current Balance Amount
Current age (#):
Age you expect to retire (#):
Current balance of your plan ($):
Expected annual rate of return (%): (Get Current Rates)
Income Tax Info Amount
Federal income tax bracket (%):
State income tax rate (%):
Your Results Lump-sum Distribution Tax-deferred Rollover
Current value before taxes and penalties:
Income tax paid:
Total left now:
Future value before taxes:
Future taxes to be paid:
Future net available:

Leverage Home Equity & Keep Your Money Invested in the Market

San Diego Homeowners: Leverage Your Home Equity Today

Our rate table lists current home equity offers in your area, which you can use to find a local lender or compare against other loan options. From the [loan type] select box you can choose between HELOCs and home equity loans of a 5, 10, 15, 20 or 30 year duration.

Rollover Your Retirement Funds Correctly

If you have been saving in a 401K, provided by your employer but have either lost your job or moved on for a better opportunity, then you have an important decision to make. Should you leave your money where it is or roll (transfer) it to another account? And how do you do it without penalties or taxes?

Three Options to Roll Your Funds

Option #1

You can simply leave the money with your former employer’s plan. There is no requirement to move it. If you are happy with the plan’s investment choices, the fees are low, and your money is making decent growth, then leave it alone. If you retire from a company at age 55 or older you can access the money without the 10% penalty. You can also borrow from it. If you roll it into an Individual Retirement Account (IRA), you have to wait until age 59 ½ for the money to be penalty free.

Option #2

Another way is to roll it to an IRA of your choice. It remains tax deferred, meaning there are no taxes until you withdraw the money during retirement. Most often you will have more investment options in your personal IRA than in your former employer’s account. If you choose this option, it’s most important to do a direct transfer by contacting your former employer’s plan administrator. They will handle the transfer into the new account.

Do NOT ask for a check made out directly to you. This will trigger an automatic 20% deduction for federal taxes. You may also be tempted to use the money for other things and this would be detrimental to your retirement goal. As mentioned above there is also the 10% penalty if you withdraw the money before age 59 ½. If you do withdraw the money in your name you have only 60 days to deposit it into an IRA or it will be considered a lump sum distribution subject to taxes.

Option #3

Your third option is to roll the money into your new employer's account. Not sure how good their plan is? Then check out for the ratings.

Don’t Be Tempted to Use the Cash

Regardless of which option you choose, one can’t express enough the importance of not removing any money from an IRA before actual retirement. If you do so before age 59 ½ you will lose 40% of your withdrawal due to penalties and taxes.

I Put All My Eggs In One Basket.

Unfortunately, statistics show that when rolling money over to an IRA, one out of three employees dip into their cash. This is especially true for those in their 20’s and 30’s who do not understand the importance of compound interest. This is when interest is added to the principal of an account and from that point forward the interest earns interest. This is different from simple interest where interest accrues only on the original principal.

For instance, if you had $10,000 in your account and it grew at 10% annually, after one year you would have $11,000. If it grew again the second year at 10%, you would now have $12,100 ($11,000 X .10). So your interest grows interest. The longer your account remains untouched the more it compounds.

San Diego Home Buyers May Qualify For Low Downpayment Home Loan Options

Explore conventional mortgages, FHA loans, USDA loans, and VA loans to find out which option is right for you.

Find Out What Loan You Qualify For & Get Pre-Approved Today

Check your options with a trusted San Diego lender.

Answer a few questions below and connect with a lender who can help you save today!