Pension Plan Rollover to 401(k)

Written by True Tamplin, BSc, CEPF® | Reviewed by Editorial Team

Updated on December 13, 2022

The ideal way to rollover a pension plan into a 401(k) is through a direct transfer. By doing this, to avoid paying the withdrawal tax on your pension and can defer your taxable income. You can also take the pension as a payout, but it will be taxed.

Can I Rollover a 401(k) into a 529 Plan?

You cannot rollover a 401(k) into a 529 plan. Any withdrawals you make from your 401(k) will be taxed, and be subject to an early withdrawal fee if applicable. This is also the case for individual retirement accounts.

Pension Plan Rollover to 401(k) FAQs

What is a 401(k) plan?

A 401(k) plan is a retirement plan offered by an employer designed to help employees save for retirement.

What is a pension plan rollover to 401(k)?

Sometimes, you will be able to move the normally untouchable funds from your pension plan and put them in a new 401(k). This is called a rollover.

What is the difference between a Roth 401(k) and traditional 401(k)?

With a Roth 401(k), taxes are paid as money is put into the retirement account. With a traditional 401(k), taxes are paid as money is taken out.

Are there other retirement savings plans other than a 401(k) plan?

Alternatives to 401(k) plans include traditional IRAs, Roth IRAs, pension plans (if your employer offers one), and 403(b) retirement plans for employees of non-profit organizations.

About the Author

True Tamplin, BSc, CEPF®

True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.

True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide, a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.

To learn more about True, visit his personal website, view his author profile on Amazon, or check out his speaker profile on the CFA Institute website.

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