I have a 401k that I want to transfer to my new broker as a Roth IRA. The first problem is that I got it as an adjunct at a school but due to enrollment I don’t have any classes and don’t foresee ever having classes in the future. Is that enough to be “separated” from the school? I also know that I will be paying the taxes on the rollover but will I also have to pay the 10% penalty since it is going into a retirement account? Lastly would my new broker or the old one handle all of this?
It’s best to explain all this to your new broker, and they would be able to advise you best on the tax law and your specific situation. When I transferred some of my financial stuff to another broker (USAA), I just called them up and explained my situation and they walked me through everything. YBMV.
FWIW, I’m pretty sure you won’t have to pay the 10% penalty.
Either can help, but in my experience the new broker will be eager to help, while the old one will do what they are legally required to do and not not much more.
Note: the Google friendly term to use is “IRA conversion”
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Are you sure it is a 401k and not a 403b or 457b? The treatment is pretty much identical, but you should figure that out. The latter two types are more common with educational employers. Any particular reason why you want a Roth?
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You should not pay a 10% penalty (note that some states add their own penalties) if you do it properly. You will have to pay a tax. The wrong way is to withdraw the moeny and deposit in a new one. And don’t take out extra money to pay the tax or that’s a regular distribution subject to penalty, just set aside some of your income to pay the tax (which may not be substantial).
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You must also keep the funds in the Roth for 5 years or risk penalty. You can deposit more money and withdraw that without penalty if it meets various exceptions (age, home purchase, etc.), just the portion you converted is earmarked.
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I would see the new broker.