Leaving: Rollovers: Other Issues
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HPAlumnipedia > Leaving > Rollovers > Other Issues
June Nishimoto, Dec 2002:
The only "gotchas" on moving funds from HP to an IRA that I have heard of:
- You may want to know that in many states, IRAs are not afforded the high level of protection from creditors, bankruptcy, liability lawsuits etc., as 401Ks. There is a wide variation in laws within the States. California's laws, for example, are a bit vague, but apparently it protects "amounts necessary to support the debtor and dependents." Hopefully, no one is in such a situation, but it is something to be aware of...
- The deadline for Roth to IRA conversions is Dec 31 and the income ceiling may be too high for many -- especially with severance payouts. ($100,000, single person or married with joint filing). Fidelity lets you do a lot on online. However, their Retirement Center is extremely backlogged right now, so you may end up going right up to the deadline before you actually see the conversion. I believe if you decide you have converted more than you want to pay income taxes for, you have until the tax due date to reverse (recharacterize) it. After that, a mistake could end up with early withdrawal penalties, etc. for the excess.
Bob Adams, Certified Financial Planner, Jun 2006:
Over the years many people have reported extreme frustration and delay involved in working with Fidelity. Both my wife and I personally experienced this and many of my clients have as well. I've since discovered a better way.
A suggestion I have for you is to go into a local Fidelity Investment Center if one is close-by... Taking your forms into them seems to get the process done very quickly and correctly. The folks at the branches seem to be there to expedite your paperwork and keep you happy. They don't try to talk you out of it or try to sell you anything. I've seen that calling the Fidelity 800 number and going the traditional route can take up to 5 months.
Alan Silverstein, 2004?
If you are considering moving retirement funds to an annuity (or just plain buying one), this website might be worth a look first.
