Author Topic: 401k in-service rollover  (Read 213 times)

DFundsRLow

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401k in-service rollover
« on: October 30, 2018, 02:47:02 AM »
Hello all,

Can anyone point me at some clear guidance on this?  I've seen conflicting opinions on whether it's allowed or not, and looked around the IRS website for clear answers (shockingly, there are none).

I'm still employed, 50 yrs old, and would like to consider rolling my employer-sponsored 401k into an IRA in order to get better investment choices.

Some articles I read say it can't be done without a hardship, or that I have to be 59 1/2, etc. - and some seem to imply that it's fine. 

Would like to get some better information before I talk to my plan administrator, and then I'll likely have to call our 401k provider myself to ask them.

Thanks much!


reeshau

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Re: 401k in-service rollover
« Reply #1 on: October 30, 2018, 04:54:53 AM »
It depends on the plan's rules.  The only preparation you could do before talking to the plan administrator is to review your plan's documentation, namely the summary plan description.  It should describe the rules.

For reference, my plan allows a single in-service rollover after 50, up to 1/2 of the account value.  That has nothing to do with what your plan allows.

One other caveat I would add:  if you are utilizing the backdoor Roth conversion, understand that your total IRA balances (all accounts) are considered for calculating gains--meaning, it would no longer be free.  Your gains would be averaged by your IRA contribution (assuming zero, if you do it quickly) plus the rollover IRA you just created.  401k balances are not considered.
« Last Edit: October 30, 2018, 05:04:21 AM by reeshau »