A change in your job most likely means a lot of other major changes in your life — whether you were laid off or simply left for another opportunity. In the midst of those changes, it can be easy to lose track of your John Hancock 401k associated with your old employer.
Fortunately, the process of rolling over your John Hancock 401k is simple and can be relatively painless provided you follow some simple steps.
So, here’s a look at what to do if you need to roll over your John Hancock 401k.
Step 1: Decide Which Account Is Best for You
The first step in the process is figuring out what the best plan of attack is for your personal financial situation. There are five basic 401k rollover options for what to do with the 401k account from your old employer:
- Keep it where it is
- Move it into the 401k account with your new employer
- Roll it over into a traditional IRA
- Roll it over into a Roth IRA
- Cash the account out
Leaving the money in your John Hancock 401k is simple, and if you like using John Hancock, you can keep it there. However, keeping track of multiple accounts can be unwieldy, and you can no longer make contributions to that account or use it for 401k loans.
Merging it into your new 401k account will simplify things, but the new provider might have more fees or different investment options that don’t suit you. Not to mention, it’s not possible unless your new employer has a 401k plan.
Converting to a traditional IRA is an easy option that anyone can do regardless of whether or not they have access to a new 401k plan, but IRAs often don’t have as many legal protections from creditors. If you want to convert to a Roth IRA, you’ll have to pay taxes on the money in your account.
Finally, cashing out means you’ll have your money now, but it will also result in steep tax penalties — not to mention the end of your nest egg.
Step 2: Set Up Your Rollover Account
If you do want to proceed, it’s best to make sure the new retirement account is in place and ready to receive your funds prior to beginning the process with John Hancock. In the event that the funds from your old 401k don’t make it into the new account within 60 days, it will be considered a withdrawal and you’ll owe taxes on the full amount. Learn all the 401k rollover rules you need to know.
Of course, you can opt to stay with John Hancock for the new account. Simply open up a rollover IRA on the John Hancock website or call a representative.
Step 3: Contact John Hancock
Once you have a new account to roll over your 401k into, reach out to John Hancock representatives about beginning the process. They should walk you through moving over the new funds, but be sure that you’re asking for a “direct rollover.” That means that the money is remitted directly to the new retirement account rather than to you. An indirect rollover — where you receive a check for the funds — will result in potential tax penalties.
Step 4: Report the Rollover on Your Taxes
Although a direct rollover should be completely free of taxes and fees (unless you’re converting to a Roth IRA), you still need to report the transaction on your taxes. You should receive a 1099-R from John Hancock, so just be sure to include that in your normal tax filings.