How to Roll Over a Prudential 401(k)

No matter where you started your career, you might be at a point where it’s come time to roll over your Prudential Financial 401(k) that you had through a former employer. Prudential is mostly known for life insurance and other financial advisor services, but they also act as a 401(k) plan sponsor and plan administrator.

Many people have a 401(k) with Prudential Financial, but some may want to transfer their retirement savings to another institution to take advantage of better investment options, lower fees, or other benefits.

Here, we’ll provide an overview of what a 401(k) rollover is, and why one may be necessary. We’ll also discuss the different types of rollovers along with their advantages and disadvantages.

Then, we’ll provide a step-by-step guide to rolling over a Prudential Financial 401(k) to another financial institution. Finally, we’ll offer tips for a successful rollover and highlight the importance of avoiding common mistakes along the way.

3 Steps to Rollover a Prudential Financial 401(k)

Rolling over a Prudential 401(k) is a matter of following a few steps carefully. Below, we’ve outlined the steps to moving your old retirement savings account.

STEP 1

Step 1: Preparing for the rollover process

As you prepare for the rollover process, you’ll need to gather relevant information and documents, such as account statements and personal identification information. Important data might include:

• Your Prudential Financial account number, and plan number (if applicable)
• The type of 401(k) account you have with Prudential (Pre-tax or Roth 401(k))
• Your new account number (of the account receiving your 401(k) rollover)*
• Your Social Security number
• Your current and former addresses

All of this information, taken together, should help Prudential locate your old 401(k).

*To determine the type of rollover that’s best for your situation — and the account type you should roll into — consider your retirement goals and the related tax implications. Most people have the option of rolling their 401(k) into an IRA, and others can even merge their old 401(k) with their new 401(k) — if their current employer allows.

STEP 2

Step 2: Contacting Prudential Financial

To initiate your rollover, you’ll need to contact Empower Retirement, LLC, which as of April 1, 2022, is the new point of contact for Prudential Financial 401(k) administration. You can learn more about the acquisition here.

Once you’ve contacted the financial professionals at Empower, you can request a direct rollover of your Prudential Financial 401(k) plan to a new retirement account (and new financial institution) of your choice.

You should also coordinate the rollover with your new financial institution as well. If you’ve decided to open an IRA at an online brokerage like Vanguard or Fidelity, they’ll let you know if they require any paperwork to complete the incoming funds transfer.

If you’re rolling your Prudential Financial 401(k) into a current 401(k) plan with a new employer, (if you’ve already managed to find a new job) make sure to confirm with your new employer that they’ll accept old 401(k) plan roll-ins.

STEP 3

Completing the rollover

As part of the process, be sure that you’ve reviewed and signed all documents to authorize the transfer of your retirement funds. It’s likely that both Empower (the company now administering your Prudential retirement account) and your receiving institution will require some authentication to ensure you have the authority to move money.

When you see the funds in your new retirement account, make sure to invest them according to your broader asset allocation. Whether you’ve moved funds to a traditional rollover IRA (Individual Retirement Account) or an after-tax Roth IRA, you’ll still need to take the active step of putting your money to work. Some providers offer automated portfolios, and others permit you to hold an annuity within the confines of your IRA.

If you see that the rollover isn’t progressing, or if several weeks have passed with no movement, reach out to both providers to see if either is missing any completed forms.

Tips for a Successful Prudential Financial 401(k) Rollover

Avoid common rollover mistakes

Some common mistakes that people make when rolling over a Prudential Financial 401(k) include:

• Failing to properly research rollover options
• Neglecting to review and sign all necessary documents
• Forgetting to invest their retirement funds once they’ve arrived in your rollover account
• Sending pre-tax 401(k) money to a Roth IRA, creating an opportunity for added income tax
• Missing key disclosures on rollover paperwork

To help avoid some of these errors, consider creating a checklist of all necessary steps or seeking guidance from a financial advisor.

Understand tax implications

Explain the potential tax implications of rolling over a Prudential Financial 401k, including potential penalties or taxes on early withdrawals.

If you roll over your 401(k) to another qualified plan (another 401(k) or 403(b)) you can avoid taxes and penalties entirely. Direct rollovers from pre-tax 401(k)s to traditional IRAs should also be clear of tax or penalty considerations.

Real issues can arise if you elect to take an indirect rollover from your distributing plan and fail to re-deposit your full pre-tax balance to another retirement account within the given 60-day timeframe*. If you don’t re-deposit the money in time, you’ll get hit with both taxes and a 10% early withdrawal penalty on the entire pre-tax balance. Ouch!

*Recall that all indirect rollovers from your old 401(k) plan account will have tax withholding to the tune of 20%. For instance, if you have a $100,000 401(k) plan balance, and choose an indirect rollover, you’ll only receive $80,000 in your bank account (since $20,000 will have been withheld for federal income tax).

Choosing the right institution

It’s critically important that you choose the right institution to receive your 401(k) rollover. Some key considerations include:

• Fees. Naturally, all retirement account providers will have unique fee schedules. Take some time to really understand what you’re signing up for.
• Services offered. Online brokerage services might offer just a bare-bones IRA account, or they might also offer investment management or financial advisory services. Be clear about what you hope to receive from a new retirement account provider, and shop around!
• Available investments. Most 401(k) plans only offer mutual funds and, in certain cases, access to company stock funds. On the flip side, IRAs offer access to single stocks, bonds, ETFs (Exchange Traded Funds), and in some cases, even crypto.

FAQs

How do I roll over a Prudential 401(k) to Fidelity?

Rolling over a Prudential 401(k) to Fidelity should function like most other rollover processes.

You’ll first need to open an account at Fidelity (either a traditional or Roth IRA, depending on the type of plan account you have at Prudential).

Then, you’ll need to contact Empower Retirement and have them locate your Prudential 401(k).

From there, request a direct rollover of funds to your new Fidelity account. Make sure to have all relevant information from Fidelity about your new account when you make the call to Empower.

How do I get my money out of a Prudential 401(k)?

If absolutely necessary, you can take a loan or withdrawal from your Prudential 401(k) at pretty much any time. You should contact Empower Retirement for all questions related to your Prudential 401(k), and to receive the forms necessary to request a withdrawal from your plan.

If you’re looking to roll over your Prudential 401(k), this is a separate process entirely, and is outlined in an earlier section.

Help Managing a Prudential Financial Rollover

Without question, there are a number of potential challenges when performing a rollover during a job change or retirement. However, it’s still possible to get through the rollover process without any tax consequences — and in a reasonable amount of time.

That’s where Capitalize comes in. There are many benefits to working with a trusted partner during a process with which you may be unfamiliar, not least of which is your own peace of mind.

Our free-to-use rollover service has helped thousands of retirement savers like you find a new home for their old retirement plan. Ultimately, we help people gain control of their money.

It just takes a few minutes to get started today!