Convert a 401k to an IRA

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Establish an IRA at discount brokerage house, such as Scottrade or Fidelity. There is no need to put any money in it at this time. You will soon put your 401k money into it.

Contact the plan administrator at your former employer and explain to him/her that you need to convert your account to an IRA and that you need the administrator to send you the conversion paperwork. The administrator’s phone number should be listed on the front page of your quarterly 401k statement.

When you receive your paperwork, fill it out diligently. You don’t want to get hung up on some pedestrian protocol issue. Send the paperwork back to the administrator. It should take between a week and 3 weeks for the money to be sent to your new brokerage account. Stay on top of it.

Once the money is in your account you need to allocate it correctly, that is to say, invest it. The closer you are to retirement, the more conservative you should be as a general rule. 


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