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Question for the Money Doctors

Question submitted on Aug 26, 2013.

Question

I have a check that is my IRA from my company when my then employer sold her practice. I want to put it into my current IRA with another company. The check is made out to me AND my former employer advised her employees to put the name of the instutution we planned to put it into after our name on the PAY TO THE ORDER OF line. Do I need to endorse my check before sending it to the IRA institution?

Answer

Generally employer sponsored retirement plans are not IRAs, unless they are SEP IRAs or SIMPLE IRAs. Employer sponsored retirement plans may be 401(k) plans, Profit Sharing Plans, or Pension Plans. You can certainly rollover your former employer''s retirement plan to your new employer''s retirement plan. You can avoid dealing with checks if you did a Trustee to Trustee transfer.

Trustee to Trustee transfers are technically not rollovers. This avoids all the problems you are having with the check.

Go to your new employer''s Plan Administrator to find out how to do a Trustee to Trustee transfer. If you already have the check, go back to the original financial institution and tell them you want a Trustee to Trustee transfer. They will cancel the check and electronically transfer the account to the new financial institution.

Here''s a tip - The financial institution or financial advisor puts on seminars to educate employees about the retirement plans and their investments. This generally happens during lunch or at the end of the day. I encourage you to attend these seminars. Also the retirement plan website would have a lot of good articles and videos about the plan and investments. The more you learn, the more informed you are so you can reach your financial goals.

Also, please take a look at the 360 Degrees of Financial Literacy website, there are many good articles here.

Good luck!


For additional information visit http://www.360financialliteracy.org/