401k Self Directed IRA Rollover

One type of 401k rollover is rapidly gaining popularity - the 401k self directed IRA rollover. The 401k self directed IRA rollover is very popular among entreprenuers who want to invest in less conventional investments such as real estate. Unless they do a 401k self directed IRA rollover, they would not be able to invest freely. If you are a savvy investor, a 401k self directed IRA rollover may be for you.

How to do a 401k self directed IRA rollover?

The process of a 401k self directed IRA rollover is the same as any 401 K IRA rollover. The steps for a 401k self directed IRA rollover are as follows.

1. set up a self directed IRA at a financial institution. Not that not every financial institution offers a self directed IRA account.
2. call the 401 k administrator of your ex-company and tell them that you want to do a 401 k IRA rollover and ask them for the forms needed for a 401 k IRA rollover. Most 401k administrator does not even need to know that you are doing a 401k self directed IRA rollover, not just an ordinary 401k IRA rollover.
3. fill out the 401 k IRA rollover forms and send back to the 401 k administrator.
4. wait for the 401 k IRA rollover to complete and 401 k assets transferred to the self directed IRA.

Once you have found an administrator that offers a self directed IRA, all you have to do to open a self directed IRA is fill out an application form for a Self directed IRA.

401k self directed IRA rollover when I already have an non self directed IRA

It does not matter if you already have an IRA or not. You can open as many IRA as you want including a self directed IRA. Therefore, you can do a 401k self directed IRA rollover even if you already have an IRA account or two.

Pay attention to the self directed IRA contribution limits

Just like any other IRA accounts, a self directed IRA account has the same IRA contribution limit. However, a 401k self directed IRA rollover does not count toward the self directed IRA contribution limit. The self directed IRA contribution limit for 2006, for example, is the same as the rest of IRA accounts but your 401k self directed IRA rollover can be of any amount.