401K Rollover while still working
Thank you for your website – I check it every day and I have learned so much from you from your books, articles, and the questions that you answer every day on this site. You provided an answer to a question regarding 401k conversions to ROTH and regular IRA’s and you mentioned that:
“However, you don’t say whether you are still working for the company. If you are still employed, you cannot roll out of your 40l(k) and into an IRA! But if you are no longer with the company, you could roll a portion to a traditional Rollover IRA and some to a Roth. Check with your plan custodian.”
I researched a conversion to an traditional IRA with my present 401k provider and they have said that once I reach 59 1/2 years old, even while still employed, I could start moving my funds out of the 401k and into a traditional IRA (hopefully a Vanguard account). I don’t know if this is an option under every plan, but I wanted to share this information in the spirit of benevolent reciprocation for all the information that you have provided to me……
Thanks again for all your help!
Terry Says
Thank you. I totally forgot about the exception in SOME (but not all) company plans for an “in-service4” rollover.
Here is the rule:
An in-service rollover allows an employee (often at a specified age such as 55) to be able to roll their 401k to an IRA while still employed with the company .
And when I searched I was surprised at how many companies allow this!
According to the Profit Sharing Council of America (PSCA), up to 77% of 401K plans include a provision for in-service 401K rollovers.
So thank you for helping me up my game!
