questions about 401(k) rollovers:

i have two questions regarding 401(k) rollovers. after some googling, i believe the laws might have changed in 2002, so i'm even less sure than i otherwise would be.

(1) mrs. unblock has a 401(k) that has both pre-tax and after-tax portions (technically it's a 401(m) because her employer was a mutual insurance company, though i doubt that matters). can she roll this over into two iras, on pre-tax, the other after-tax? or would one just roll it over into a single ira and keep track of the split?

(2) i have a 401(k) with my current employer, but it sucks because the fees are outrageous. i would like to roll it over into a self-directed ira, but i'm not planning on quitting anytime soon. can i roll it over based on a "life event" (birth of a child)? does the irs restrict this, or is it just a matter of the rules of my particular plan?

tia

(although there may well be one here who will see this). The rules are complicated, and if you do the wrong thing you can lose the tax-deferred benefits and perhaps pay penalties as well.

Although on number 2, you could simply stop participating in the 401(k) and open your own IRA. A tax person will help you about what to do.

it's an absolute huge no-no to give financial advice to people over the internet. It would be a firing offense, and everyone in the business ould know that.

We have to do what's called "due diligence" on our customers meaning we have to see the plans, know our clients' risk tolerance, age, net worth, income before giving advice.

This leads to the most ridiculous information being posted on DU about investments and such (not talking about this thread), where the professionals are not allowed to comment but 19 year olds who don't have a job, a dollar or a clue, will post completely erroneous informtion ad nauseum.

Anyway, I have lost my temper on this subject in the past.

Probably best to just say that economics and investments are the topics which DU handles about the "worsiest." Don't make any life decisions on those topics based on what you read on DU.

Go see a professional if you have questions needing professional advice.

try a search on DU?

she would have had to roll-over the pre-tax portion and take the after-tax portion out in cash. Now she can roll the entire amount over into one IRA - combining both pre- and after-tax contributions. It becomes a bookkeeping problem when she starts taking money out, because she'll need to keep track of what % is pre-tax and what % is after-tax . .. otherwise she will end up paying taxes on the entire amount, even though she already paid taxes on the after-tax bit.

Because of that, I usually tell my clients to take the after-tax amount out in cash and invest it somewhere else, so that the IRA ends up being 100% pre-tax dollars.

As far as your own 401(k), the IRS doesn't recognize those "life events" the way your medical insurance plan does. Although you could stop contributing to the 401(k) and just put new money into your own IRA, you can contribute more into the 401(k) than you can into the IRA, plus you might be giving up an employer match. I would just deal with the fees that are being charged, but not stop contributing. Besides, an outside IRA will still have some fees - though maybe not as much as you're being charged right now.