Published on Friday, July 5th, 2024 03:56:44 PM
If you have been thinking of a way to get ahead financially for your future, consider this proven method.
To move money from a 401(k) to an investment account without being taxed, you can consider the following options:
1. Direct Rollover: Roll over your 401(k) funds directly into a traditional IRA (Individual Retirement Account) or another 401(k) plan. This is a tax-free transfer.
2. Trustee-to-Trustee Transfer: Transfer funds from your 401(k) plan to an IRA or another qualified plan, like a solo 401(k) or a SEP-IRA. This transfer is also tax-free.
3. In-Kind Distribution: If you have investments in your 401(k) plan, like company stock or mutual funds, you can transfer them directly to an IRA or a taxable brokerage account without selling them first. This way, you won't trigger capital gains taxes.
4. Net Unrealized Appreciation (NUA): If you have highly appreciated company stock in your 401(k), you can use the NUA rule to transfer the stock to a taxable brokerage account and pay taxes only on the original cost basis. The gains will be taxed when you sell the stock.
It's important to note that if you cash out your 401(k) or take a lump sum distribution, you'll be subject to income tax and possibly a 10% penalty if you're under age 59 1/2.
Always consult a financial advisor or tax professional to determine the best approach for your specific situation.
The method ensure that your money grows not only at pay period, but on a daily basis.
-iHelp Movement LLC