It’s that question time: Can I roll my 401k to a Roth IRA? When considering your options on how to fund your retirement, you may find yourself asking the question, Can I roll my 401k to a Roth IRA? The answer to this is definitely yes. It is really quite a simple process and many people have done it successfully and have been happy with the results.

The first thing you have to do after you ask, Can I roll my 401k to a Roth IRA? is to check and see how much money you make annually. This will tell you if I can roll over my 401k to a Roth IRA. If you are single and are making over $116,000, you do not qualify. Similarly, if you are married or have a joint account, then the maximum amount of money you can make is $169,000 before you can no longer qualify for a rollover. However, all is not lost if you are making too much money to qualify. You still have the option of rolling over to a traditional IRA; however, this option is less desirable because it requires that you pay withdrawal taxes.

If you asked yourself Can I roll my 401k to a Roth IRA during a time in which you are switching jobs, that is the best time to do the rollover. Rolling the money over now will cut all ties you had with your previous employer—making it quite difficult for them to charge you any fees. Starting a new job usually means starting a new lifestyle: start this new lifestyle by breaking completely away from everything entitled to your previous job.

Rolling over a 401k to a Roth IRA is really a simple procedure. First, after you have verified that you are qualified to rollover your money, open a Roth IRA at your bank. Next, you will want to get a hold of the bank or institution in which your 401k is being held. Ask about any procedures or paperwork involved in making a direct-to-Roth IRA rollover. These queries may take awhile to be answered, so be patient. Fill out the paperwork and return it. Finally, all you have to do is sit and wait for the money to arrive into your Roth IRA account. This may take a few weeks, so sit tight.

There is one downside to rolling over a 401k to a Roth IRA, however. Because you are transferring money from a pre-tax source to a post-tax source, you will have to pay taxes on all of the money that is rolled over into your new account. Keep this in mind when you are deciding how much money you actually want to transfer over.

So, the next time someone asks you, Can I roll my 401k to a Roth IRA? you will know the answer. You can (if you are not making more than the maximum income) and it is simple to do. This option is especially ideal for those who are switching jobs, something that has been happening more and more lately.