Rolling 401(kl) to a Brokerage account.

[fruitbowlk]

What are he positives and negatives?

[jpg7n16]

Positive:
- money is accessible
- no required RMDs at retirement

Negatives:
- taxed on entire balance at highest marginal rate
- 10% penalty on entire balance (in addition to the taxes)
- commissions to repurchase mutual funds in brokerage account
- loss of tax deferral on investments


If you want to roll your 401k over, ask your old provider to do a direct rollover into an IRA, not a brokerage account.

[MonkeyMama]

I presume OP means they just want to rollover the money into an IRA they have control over.

There is really no downside in that case. You have more control over the money and unlimited investment choices.

You can hold an IRA anywhere (bank, brokerage, etc.)

[bjl584]

I presume OP means they just want to rollover the money into an IRA they have control over.

There is really no downside in that case. You have more control over the money and unlimited investment choices.

You can hold an IRA anywhere (bank, brokerage, etc.)

This is what I assumed as well. If this is the case, then the only real downside would depend on which brokerage firm you want to roll the account over to. Pay attention to fees, commissions, and to customer service.

[Slug]

JPG is correct given the way the question reads. If others are correct reading between the lines, then yeah there really is no downside and you get control of your funds.