Hi everyone. New to MMM, and wish I would have found it years ago! Question: My company's 401k plan permits transfers in from IRAs. I plan to retire in the year I turn 55, and begin accessing my retirement account. Are there any good reasons why I shouldn't transfer my IRAs to my 401k, thus allowing me early access to those funds as well? If so, are there any time limitations or anything else I should be aware of? Thank you in advance.
ETA: Partly misleading information stricken due to irrelevance to the OP's circumstances.
Hmm. My understanding is that a 401K suffers the same penalties as an IRA for early withdrawals:
https://www.personalcapital.com/blog/retirement-planning/can-withdraw-401k-ira-penalty-free/
So that's one reason to reconsider.
Another argument against rolling your IRA into your 401K, is that many 401Ks have an extremely limited, and sometimes more expense-laden, choice of investment options than an IRA held at a brokerage. It all depends on your specific employer's plan.
All things being equal, I would keep the two accounts separate until you retire, and then roll the 401K into an IRA when you stop working.
Do you have other accounts, either taxable or Roth*, that can fund your lifestyle between ages 55 and 59-1/2? If you do, you should be in pretty good shape to stay on plan. Keep in mind that you can only withdraw
contributions from a Roth penalty free before 59-1/2**. Gains in a Roth are still subject to penalty before then.
*Caveat: Personally, I would want to keep any Roth account for as long as possible before drawing it down. YMMV.
**Caveat: Other qualifiers apply. Google "Roth 5 year rule" for more info.