Rolling Over Mom's 401K

My Mom who retired a few years ago has a 401K from her old employer.

I called a mutual fund company to see how she can roll it over to an IRA.

They said that she can open an account with zero balance and then roll over 401K to it, she has no earned income so I don’t see how she can open IRA, it doesn’t sound right to me, can she do that ?

You were told correctly. She can open an IRA to roll money into from a 401k, other IRA, or similar. Putting new money in it is what she can’t do.

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The rollover should be handled between the 401(k) administrator and the mutual fund company. This happens all the time and mutual fund companies are happy to bring your money in. Your mom will have to choose one or more funds for her IRA.

Don’t have your mom tell her 401(k) administrator she wants the money, then try to send the money to a mutual fund company and tell them this is for an IRA. That would be equivalent to cashing out the 401(k) and getting hit with a big tax bill, and then she couldn’t open an IRA without any income.


the previous posters have i right.
Read this at Investopedia: Direct Transfer: What it is, How it Works, Types.

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AND… don’t be getting on the phone with institutions telling them, “My Mom wants to do XYZ… how does she do it?” This is a prime flag for elder abuse and elder financial scamming. You can coach your Mom what to ask about… you can dial the number for her (use a speakerphone)… let her initiate the conversation, and also let the person on the other end know you are on the call and who you are, and have your Mom say that she wants you on the call for help… and gently help your Mom in a non-pushy way. But ultimately, it’s your Mom’s decision, and if she doesn’t want to do what you have cooked up in your mind for her, you have to pound sand! It’s her money, not yours!

Finding out how to do something, and yanking the reins out of the owner’s hands are entirely different things. This read like the former, not the latter.

“I called a mutual fund company to see how she can roll it over to an IRA.”

This sends up a few hairs on the back of my neck. It should be “I advised her to call a mutual fund company to see how she can roll it over to an IRA.”

I understand the intent, I manage my Mom’s portfolio, but it doesn’t take much more for a investment institution employee to start to become suspicious about elder abuse. Like if the OP were to call a company and start with:

“My Mom wants to roll over her 401k, how do we do that”.

It is something to handle carefully. If a child gets on the wrong side of a financial institution, accounts can get locked up to the detriment of a parent. Fidelity does lockups in a heartbeat. Lots of cases just like this on Reddit r/Fidelityinvestments

You are being too focused on the specific wording used here. When I am typing something, particularly if I am on my phone, I am suscinct. A person to person conversation is very different.

I ask my kids for information…to find things out for me… all the time, based on their strengths and expertise. I could care less what language they may use to get that information. And for all you know, the original poster here may have a financial power of attorney. You are leaping to conclusions that are not warranted.

Thank you all for the info.