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Can I rollover my 401k while still employed?


In recent conversations, the question has come up as to whether you call rollover your 401k to a traditional IRA while still employed at the sponsoring employer. There seems to be some confusion about this and rumors of new laws that allow it.

The short answer to the question is, no. By law, you can not withdraw 401k contributions, that is, pre-tax salary deferrals, before severance, plan termination, turning 59 1/2, death, disability or hardship (and you can’t roll over hardship withdrawals).

The long answer is, yes, under certain circumstances, you can.

The standard exceptions do apply, for example, if you are 60 years of age or older, and still working, most qualified plans allow “age 59 1/2 rollovers”. If a particular plan does not, they most likely allow rollovers at age 65. The exceptions can add to the confusion and there is such a thing as the “in-service withdrawal”.

To me, the most interesting exception being the fact that the law only applies to your pre-tax salary deferrals. You CAN rollover (or otherwise withdraw) employer contributions, or employee (after-tax or rollover) contributions. And you can do so without any required taxes or penalties.

This can be a big deal. I know someone who’s matching contributions from his company were paid in company preferred stock and it ended up comprising a whopping 75% of his total plan holdings. He was not allowed, then, to diversify any matching funds elsewhere within the plan.

Being able to rollover the employer contributions was a great opportunity for him diversify his porfolio, get back to a better asset allocation, and contribute to more cost effective funds. But, it was not without penalty. The penalty (defined specifically by his company’s plan) was that he could not contribute to his plan for 12 months beginning from the day the withdrawal took place.

Some employer retirement plans have provisions for you to do a 401k rollover on some of the assets while you are still employed by the employer, but you’ll need to check with your employer to see if they allow it, and what penalties may be associated with it. Most 401k prospectuses and companies in general don’t make this common knowledge to employees.

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Comments

70 Responses to “Can I rollover my 401k while still employed?”

  1. pf101 on May 27th, 2007 11:42 pm

    This is always a confusing topic. Thanks for the helpful post. It’s something everyone should look into, particularly if they are in a less-than-great plan.

    Thanks,
    pf101

  2. Personal finance at KMull.com on May 29th, 2007 9:04 am

    […] Money tackles the question: Can I rollover my 401k while still employed (with the plan […]

  3. Art Dinkin on May 29th, 2007 2:02 pm

    The secret to finding out if your 401(k) lets you do a partial rollover while you are still employed is to ask the right question. Ask if your plan allows “in service distributions”. If it does, then you can at least do a partial rollover/transfer. However, most 401(k)’s do NOT allow them.

    Art Dinkin, CFP

  4. howard eisenman on June 4th, 2007 12:54 pm

    If the plan allows for an “in-service” ira rollover, and the employee/participant is under 59 1/2, is there any “tax liability”?

  5. Clint on June 4th, 2007 1:03 pm

    Howard,
    If you are rolling over qualified contributions, (employer contributions, or employee after-tax or rollover contributions), there is no tax liability. Again, the only possible penalties would be those specifically defined by the 401k plan.

  6. torqued about 401K - Early Retirement Forums on October 17th, 2007 7:49 am

    […] I thought I’d seen somewhere that you can roll over a portion of your 401k without leaving your employer (under certain circumstances) – here’s a summary… Can I rollover my 401k while still employed? […]

  7. Lamont on December 11th, 2007 9:51 am

    This article is incorrect as I have completed many still employeed 401K rollovers for my clients. It is not a taxable event because you moving the money from one tax deffered (401K) account to another tax deffered account (Traditional IRA). In addition every subsequent year you can move more money out of your 401K. What are the benefits? I’m glad you asked!

    1) You have access to many thousands more mutual funds. Whereas your selections are limited in your current 401K.

    2) Better diversification. Your 401K may have 20 funds but I, as a professional can give you access to over 8000.

    3) Professional Advice, whereas in 401K people generally choose funds in the dark. I can give you access to solid fund research.

    4) I can also put you in a NY Life Product that guanrantees your rollover amount. So this become the minimum amount you will ever receive should the market crash or take a dramatic drop. If you rollover 100K that is the minimum you will ever get back.

    But in a nutshell you can Rollover money from your 401K tax, into a T. IRA tax and penalty free no matter how old you are! I do it at least once a month for someone!

  8. Gret on January 29th, 2008 2:43 pm

    I’m still confused. My situation is that I’m 30, have considerable credit card debt, and a 401K with my current employer that would cover about half of my debt if I could access it (taking into account early withdrawl fees and taxes). So, can I rollover? Perhaps into a Traditional IRA, then into a ROTH?

  9. Clint on January 29th, 2008 6:56 pm

    Gret,
    There is no IRS law that prevents you from rolling over money from your 401k while you are employed. However, many 401k plans don’t allow it, so you’d need to check with your 401k plan administrator to know for sure. Be aware though, that withdrawing the money to pay debt and rolling it over into an IRA are two very different events.

  10. Gret on January 31st, 2008 7:52 am

    Thanks Clint. From what I understood, I wouldn’t be able to simply cash out of my 401K to pay off debt, and that I would need to roll into a T. IRA, then a ROTH.

    I have a feeling they won’t let me take it out, and it just seems shady. It’s unfortunate because ultimately I would save more for my retirement if I weren’t paying interest on debt.

    If they don’t allow a rollover, could I go to the owner of my company and ask him to change the rule, or would he be locked in to an aggreement with the 401K plan admin.?

  11. Dave on February 13th, 2008 9:16 am

    I have recently graduated from college.
    I find this “Inservice Withdrawal’ feature very attractive now that I am on the job hunt. Is there a list out there of (GOOD) companies that offer this feature to help narrow my job hunt search.
    AWSOME INFO GUYS!!!!!!!

  12. Brian Kelly on March 25th, 2008 7:47 pm

    Hi , If Lamont is still on this board… hey do me a favor and drop me an email because I have a 401(k) at my wife’s current company that [the administering company] will not rollover in any way whatsoever, and when I complained about it …

    [The administering company] contacted my wife’s employer and tried to get my Wife in trouble with the company. As if they have a legal right to threaten not only the vested assets of the plan but also my wife’s future employment with the company.

    Drop me a line Lamont because I tried quoting them the Pension Protection Act of 2006 Section 824… I tried doing it as a partial … I tried everything and they basically tried to tell me that whatever the PLAN rules say… as if it’s up to the Plan administrator to determine for PEOPLE who were vested before the company was ever bought out to determine how someone’s assets are invested for the next 20 years.

    They really ticked me off and basically thumbed their noses at me when I tried to tell them that they had to release the funds. And THEN on top of that , they tried to threaten my wife’s employment with the company.

    I’m at buddhak0n@verizon.net .. Oh and by the way I’m the only Law School graduate in the conversation . Imagine that . Sorry but this industry is screwed people . Spitzer for all his faults had them dead right.

  13. Lamont on March 26th, 2008 5:38 am

    Hi Brian,

    Although there is no law on the books that prevents you from rolling over a portion of your 401K while your still employed the “Plan Rules” seem to become similar to such a law. In my experiences I have come across many plans that limit such a transaction in fear that the employee may damage their future retirement income and I have come across an equal amount of companies that allow such a transaction. So, long story short, if the Plan Rules say you can’t do it, then well, you can’t do it! If you have the power to change the rules then you’re a powerful person.

    It is a coincidence that your email address is hosted by “Verizon” because they are one such company that allows such a transaction for their employees. Their 401K is managed by Fidelity.

    I would be interested in seeing if you could get the rules of the plan changed via an employee petition. I would use the points I listed above as reason why the company should make the change. Of course the managing company (Fidelity, etc) won’t be too happen about the change because people can move their money freely but it will benefit the employees if they are smart investors.

    Good Luck!

  14. Lamont on March 26th, 2008 5:40 am

    Hi Dave,

    There is no such list. The best way to find out is to ask the plan administrator or the plan manager. Also, just because the company allows this feature doesn’t mean they are a good company.

  15. Kieran on March 30th, 2008 3:55 am

    Hey all,

    I’m in what might be an unusual situation. I have a 401K with the company that I work for. I worked for them for 7 years in the US, then in December 2007 I transferred to work for a subsidiary in Europe. I am now employed by the European company. I can no longer pay into my US based 401K, no longer get paid by the US company, no longer have US benefits etc. Instead I’m employed under a European contract that provides a local pension similar to 401K, local benefits, etc.

    I want to get my old US based 401K into Euro based stocks. Since I’m no longer employed by the company in the US I thought there should be no issue getting the funds rolled over to an IRA that would give me more investment options. However the administering company is saying that since I still work for the same parent company that I can’t roll the money over out of their plan.

    Do you think this is correct, and if so is this an IRS rule, or is this a rule that the administering company is setting? Can I challenge it in any way?

    Thanks for your help!

    Kieran.

  16. MartiT on April 15th, 2008 11:51 am

    I need a book on the subject of in-service-withdrawals from a credible source.

    Any suggestions?

  17. Gerald on June 3rd, 2008 9:17 am

    I have pretax funds in my 401k that is totally contributed by me. My plan says that I can’t rollover my fund to any other plan. I’m trying to research how I can make this happen. If I have more investment options in an Traditional IRA why keep contributing to the 401k plan.

  18. Chris on June 30th, 2008 10:28 pm

    I am currently a pension administrator and process many distributions that are rollovers. In order for any distribution to be “rolled over” it must meet the criteria as given in the article listed above.

    “By law, you can not withdraw 401k contributions, that is, pre-tax salary deferrals, before severance, plan termination, turning 59 1/2, death, disability or hardship (and you can’t roll over hardship withdrawals).

    “The standard exceptions do apply, for example, if you are 60 years of age or older, and still working, most qualified plans allow “age 59 1/2 rollovers”. If a particular plan does not, they most likely allow rollovers at age 65. The exceptions can add to the confusion and there is such a thing as the “in-service withdrawal”.

    Rollover distributions must also be rolled over to another qualified plan or to an IRA. After working about a year in the retirement plan industry I have not seen any exceptions to these rules.

  19. Matthew on July 16th, 2008 7:38 pm

    To answer Gerald’s question as to why you would contribute to a 401k when you have more options in an IRA: The match that you receive from your employer, and the higher contribution limits for tax-deferred contributions. Generally speaking your employer will match, up to a certain percentage, whatever amount you contribute. This is free money being offered by your company as an incentive for you to save for retirement. Once you have taken full advantage of the match, there is no other reason to contribute beyond that percentage – you would be better off contributing the excess amount to an IRA, or even just a taxable brokerage account – if you’re not in a high tax bracket, the tax deferred compounding on your investment certainly helps but doesn’t have such a dramatic impact as if you were in a higher tax bracket . The IRA contribution limit for an individual in 2008 is $5000 vs $15,500 for 401ks (this is assuming you’re under 50 years of age. Over age 50 the IRA limit is $6000 and 401k limit is $20,500. An additional benefit of a 401k vs. an IRA is the ability to borrow from your 401k in the form of a loan (as opposed to withdrawing the funds from your 401k which is a taxable event and in addition the IRS will slap you with a 10% penalty if you’re under the age of 59 1/2) which is not available in an IRA.

    There are a number of larger corporations that offer “in service withdrawals” and the ability to do so is based on the 401k plan documents which you can obtain from the Third Party Administrator (TPA).

  20. nate on January 3rd, 2009 12:03 am

    wow, this is great dialog, thanks everyone for the fantastic comments. In one article I learned more than about 4 days of random browsing of “articles”

  21. Josh on January 6th, 2009 8:53 am

    To everyone I recently found this article and wanted to add my $0.02:

    First and foremost the plan must have the “In-service” withdrawal provision in the plan document in order to rollover 401k dollars into an IRA (expect to get a lot of resistance from the broker or Third Party Administrator (TPA) if this is not already in the plan because less plan assets equals less money to be made by both). Provisions for an age and length of service at a company must be made as well. So for instance say you must be age 40 and have at least 5 years of service (this helps with companies that have vesting schedules and you will see why this is important below).

    Secondly there are three types of money that can be rolled from a current 401k into your own IRA they are:
    1.) Money rolled over from a previous 401k (either through a plan change or from a previous employer)
    2.) Matching/Profit Sharing contributions from the Employer
    3.) Money Growth inside the 401k Plan

    Ironically the only money that “cannot” be moved prior to age 59-1/2 is the money that you as the employee voluntarily contributed.

    So say we have Bob Jones who has contributed $10,000 per year for the last 10 years and his company matches his full $10,000 each year and his account has grown to $250,000

    His money is classified as follows:
    Voluntary contributions: $100,000
    Employer Match: $100,000
    Growth: $50,000

    If his company had an “In-Service” provision he can move both the match and growth into his own IRA ($150,000 total) prior to age 59-1/2. He cannot however move the $100,000 he voluntarily contributed.

    Hope that helps,
    Josh Smith

  22. Joe on January 20th, 2009 7:30 am

    First off,

    Lamont is giving incorrect information. Section 401(k)(2)(B) and Section 403(b)(11) define when employees may take distritubtions… Last time I checked the IRC is a form of law…

    Chris said it best by saying

    “By law, you can not withdraw 401k contributions, that is, pre-tax salary deferrals, before severance, plan termination, turning 59 1/2, death, disability or hardship (and you can’t roll over hardship withdrawals).”

    Plan rules can are capalbe of being even more strict while someone is still employed.

    Josh mentioned

    “Secondly there are three types of money that can be rolled from a current 401k into your own IRA they are:
    1.) Money rolled over from a previous 401k (either through a plan change or from a previous employer)
    2.) Matching/Profit Sharing contributions from the Employer
    3.) Money Growth inside the 401k Plan”

    I cant find legal guidance on this yet but have been checking. I have been reading up on Section 414(w) and the proposed reg for this, but I am not sure if it applies.

    Bottom line, there is much confusion about this stuff, when maybe there shouldnt be.

  23. AMJAD M on January 27th, 2009 4:36 pm

    can i rollover my existing my 401k if my company is no longer contributing / matching my %

  24. maria h on February 22nd, 2009 8:17 am

    My father retired in 1995 ,…wondering how can i find out how much is this worth ? his 401 k ?
    He passed away in 2003 and we totally forgot that he has this?
    and how do I trace it down.

  25. Lynn B. on February 23rd, 2009 5:18 pm

    My 401k account lost $100k last year – 1/3 of my balance! On top of that, my company just suspended matching funds. I’d like to get out of this plan but am being told by the plan administrators that the only way I can do that is to end my employment. I don’t want to withdraw money, just roll it over to an IRA or something. This is ridiculous, other than leaving a company I have been employed with for 20 years, what can I do? I can’t just sit here and watch all my savings evaporate!! The plan administrator says it’s an IRS rule but I’m not so sure after reading some of these posts…

  26. Mike Montgomery on March 3rd, 2009 10:31 am

    Lynn,
    If your goal is to move your money into an investment that will not lose money, you can almost certainly accomplish that without pulling your money out of the 401(k) plan. Your plan probably offers a money market or guaranteed fund of some sort. Likewise, you if you invested in an IRA, you could very easily lose as much or more as you’ve lost in the 401(k). It’s not about 401(k) vs. IRA. It’s all about what how you choose to invest within either of those arrangements.

    Whether you should move your money to one of these more stable accounts is a different question. I don’t know you so won’t give you advice.

    I’m a fee-based 401(k) consultant that works with a dozens of plans around the U.S. and has a low tolerance for hucksters. My warning — as one with nothing to sell — is this: Beware those who are encouraging in-service rollovers out of 401(k) into IRA’s. Bad guys are preying on frustrated investors right now and they do not care about you. They will probably also tell you that they had all their clients bet on the Giants in the 2008 Super Bowl. Stay in your 401(k) plan and see what advice services are available to help you make no-nonsense investment decisions from this point forward.

  27. Edward Arambula on March 27th, 2009 4:56 pm

    My company is probably going to stop the matching on our 401K. Does this qualify as a plan changing event? I had a 5 % match. This helped when the prices dropped. I only lost matched funds. I have a little over 7k in the fund. Would you suggest i keep contributing my own funds, or stop now and invest in the market on my own. I do not think I can withdraw my funds without a penalty, so I most likely have to leave what I have in there alone. Any suggestions would be welcome

  28. Bruce on May 7th, 2009 10:04 am

    Our company has been working with many right now on “in service distribution”. This is a time when you need to look at security. We roll alot of employer contributions into indexed annuities. I know everybody has there opinions on growth and everything, but I am telling you one thing, at least last year none of our clients lost any of there initial investment. Yes there where very minimmal gains, but no loses.

    If you would like help on seeing if your company allows for “in service distributions”, just let me know and I would be glad to discuss it with you. Imagine being in a product where your prinicpal is safe, and you only take part in the market gains, not the market losses.

  29. Todd on August 26th, 2009 11:53 am

    My employer is no longer going to contribute to my 401k can I roll it over to a differant broker?

  30. Steve on August 30th, 2009 10:58 am

    I want to rollover my 403b to IRA and then next year to when income limits of off, transfer it to Roth. Question is on employment termination. If employment ends, is there a time limit on when I could be rehired by the same employer, in terms of making the termination a legitimate event that allows for 403 b rollover?

  31. Rob on October 21st, 2009 10:32 pm

    I want to roll over a portion (mostly company contributed) of my 401k into a Trad IRA on the street and I have a lot of balls in motion here: the company is switching their plan at the end of the year as a result to a class action suit ( under the new plan, all investments will be purely ‘institutional’, I lose company common stock – absorbed into a 98% stock+2% cash “stock fund”, as well as an openly traded index fund that I have made a lot of money with this past year that is being converted into a non-public institutional version of a similar index fund.

    During that time, while the aforementioned 401k change is taking place, I will be ‘unemployed’ due to a temporary lack of work – I will be expected to file unemployment to qualify for assistance from my employer, so, if the state says I am unemployed, I am unemployed in a legal aspect, right?

    I can figure the company match fairly easily, and I know what I have put in, so the remainder would be earnings, right? Are “company match” and “earnings” air-tight transferable? Why not the whole thing during the period of time I could argue that I am unemployed – no contributions being made/matched in my 401k?

  32. Jay on October 26th, 2009 12:25 pm

    “To me, the most interesting exception being the fact that the law only applies to your pre-tax salary deferrals. You CAN rollover (or otherwise withdraw) employer contributions, or employee (after-tax or rollover) contributions. And you can do so without any required taxes or penalties.”

    Can you cite your source in the IRS code for this statement? If true, this would be a great boon in my particular case.

  33. Debbie on December 3rd, 2009 4:26 am

    I left my job a year ago and didn’t receive my roll over paperwork until October of 2009. In the mean time, I was separated from the new job for lack of work and I returned to my previous employer after an eight month separation. I would like to roll over my 401k to an annuity, but the plan sponsor says that because I’m working for the original company again they won’t do it. Can they do this?

  34. Daddy Paul on January 12th, 2010 4:38 pm

    “Being able to rollover the employer contributions was a great opportunity for him diversify his porfolio”
    So true! Most 401K’s offer less choice today than 10 years ago. I reviewed a friends 401K the other day. There were not many funds worth owning.

  35. Robert on May 10th, 2010 7:15 am

    I am 34 yo and want to withdraw the money I placed in a 403(b) with my current company. I have no reason for doing so except to withdraw the money “I invested” over the past five years to move closer to becoming debt free (for a strategy know to me).

    The company says that the IRS will not allow this….blah blah blah. It is actually the company or the plan administrator that will not allow this.

    For all of you folks convinced this (early withdrawl) is a bad idea, let me show you about time value of money (there is more that you didn’t learn in finance class):
    Say I lose 25%, because I am in the 25% tax bracket. Now I have 75% left. Well, I would also pay that money if I had earned it anyway. So, to me, that value is not lost. It was actually never there! It is the cost of earning money in the U.S. Financial advisors love this to use this to their advantage.

    Next I would lose 10%. Okay, consider that a penalty the IRS mandates. I’m okay with that too. There is a cost of doing business and Uncle Sam set this up. We all know by now early withdrawls, with no “okayed reason” will face the 10% early withdrawl period. Got it!

    Now I am down to 65% left. Some states require money for their coffers beyond this. For this example, we will say that the state requires 5%. So now I am down to 60%. Oh no!! Most of you advisors fear this…….well fear not! Because I would still be at 70% if I actually was being paid that through my current earnings anyway!! Tax law 101: All income is taxable unless otherwise stated by law.

    So next the company says, no Mr. ____ you can’t have it, it’s not legal. Bull *&%^! What the company is failing to say is that “this company/this plan adminsitrator does not allow it until retirement, death or any of the previous mentioned reasons. We are smarter than you and this is how we make money. We tie up your money for 20-40 years and as long as you are employeed hear, your stuck buddy!…..we will use the IRS rules as a guise, but we seek to make money by controlling you/your money! See as you plan administrator, we pay….I mean have a great relationship with your company. They agree with us that you can not have your money and we will just say the IRS doesn’t allow this. But the IRS actually does. The only way you can have your money now (pre-retirement) or under any other defined distribution, is for you to quit us. Then and only then can we not hold your money hostage……as defined by our own predtermined rules and greed (that we never disclose in the beginning.)”

    “A bird in hand is worth more than two in the bush.”

    About time value of money, you finance majors understand this! For simplicity purposes, if someone has determined their 60% is worth more today then the 70% will be down the road, based on their own situation and calculations, yes, it may be wiser to take the money NOW so that they can invest more in the future. For me, I wanted to take my money now. That would allow me to pay off a car note NOW, become debt free over the next 16 months and return to investing more, lets say 15-35% of my income, after I am done. But, my plan administrator says that I can not unless my employment is terminated.

    Therefore, I am considering just that. Oh, more info: you business majors will understand this.

    Say you are going to invest in a foreign country. Since we have historically lived in a great country, no one has ever considered that you must consider how stable the country must be before making a wise investment decision. Well, with current days and situation, that is exactly what I am questioning at this time. I want my money so I am can pay off ALL of my bills, erase my retirement – or risk loosing this money in a situation where we have radicals changing the rules day by day to fit their political agenda. That is, I work in healthcare. I think this industry & country is facing drastic cuts to it’s working force in the days ahead under the radical progressives in leadership. (Progressives only understand power and control.) They have already laid the groundwork to pretty much mold this industry over the next 5-8 years. Therefore, for me and my house, my situation is stable today, but no one can say that I will be in the same position or better in 5, 10, 15, or 20 years from now. Therefore, that is why I am positioning my household to live off the land, if needed, starting before the healthcare industry is changed forever beginning in 2014.

    Why I am willing to give up the 10% extra today? Some of you intellectual advisors are trained to tell people “no, it’s a bad idea.” But, I say to you, you don’t have much street smarts.

    That is, when the current President’s people are saying that “Chavez….in Venezula……we saw an incredible revolution…..” you better look out! No matter your political agenda, I would consider that “fine print” if I were considering a contract with these people. Better, you better prepare for the worst and hope for the best. That is what I am doing. If I am wrong, well then the next 20-30 years of me investing is simple CD’s at a rate of 15-35% will be enough to make up the difference for retirement.

    Some bozo’s will think I am paranoid, but you must ask your own self “are their any red flags in todays market?” My answer to that is “yes, probably more red flags than not.” Next, you must ask “if I was 34 yo and not retiring until I am 65ish, can I trust that my money will be there……………?” Uh, ……do I need to answer that? wind back the clock, study history. 10 years ago I would have said GE would be around for forever. Look at the market cap today compared to then……….(I hear crickets chirping). No matter your political motivations……….look across each industry and think about companies you have considered stable in your lifetime………..GM, Dell, Microsoft, Steel companies, oil companies, Chrysler, airlines, healthcare, etc. I bet the workers in GM in the 60’s would have been singing about their their future…..sure, they got to retire. What about their workers in the 80’s….the 80’s looked bright……a lot of those workers were probably thinking different in 2007, if they were closing in on retirement.

    In strategy class, a few years back (2006), one of my friends turned in a paper on GM and about how it should go forward….a suggestion of it’s strategy. That paper, he failed….why? Well, he advised that the company would enter into bankruptcy, no matter what. The proof was in the numbers. The instructor wrote to him on his paper “GM will never fail….IT IS AMERICA.” Good thing, that student didn’t learn everything that the instructor taught. I hate that GM failed, but that attitude is resonated across this land. Capitalism, to me, is paper……..just like your 403, 401, 457, or 4whatever. Kind of like the statements that were sent out in those Ponzi schemes. One day it will fail….but hopefully the bottom of the pyramid will keep growing.

  36. Shellie on May 24th, 2010 2:48 pm

    Many people at my job said they were getting money out of their 401k and so I decided being in the bind I am in I pretty much live off of my credit cards and keep digging further and further into credit card debt I buy gas and groceries on them to get by I asked my employer if I could take some money to pay them off then that will free up about 600.00 a month to buy gas and groc. with he told me it wasn’t financial hardship enough. Very upset about this I read through our employee 401k handout and I did not see anywhere in there were it said I could not roll it over I though maybe I could roll it over to a traditional Ira and then in a little while I would draw it out of course paying the penalties. Asking my employer if I could roll it over he told me know that it was against regulations. This is very upsetting and is it true someone please help! Also I feel like if I keep pushing the issue he will try to find a reason to let me go. I need cold hard facts. Thanks for any advise.

  37. Tommy on June 9th, 2010 4:36 pm

    I still have seen no answer to the question…… If my employer stops contributing to my 401K can I now roll it over to an IRA without penalty?

    My employer stopped contributing to my 401K almost 2 years ago. I have been given the same answer that everyone else has been given….. not allowed by the IRS….period.

    They claim they added options to lower the risk.

    But I am looking to invest it in CEF’s that pay monthly dividens from within an IRA. So my money is still in a tax defered IRA and making dividens that are in government municiple CEF’s that are tax free.

    Now there are other CEF’s that I am invested in that draw a higher than usual dividens but they are not tax free. But they are good high paying investments through Nuveen, Alpine, Dreyfus, and Cornerstone. My 25K from my 401K will draw about 400 a month from CFP.

    So is my employer stopping contributions a qualifying event?

  38. Randy on June 17th, 2010 7:52 pm

    Tell me this…I am OLDER than 59 1/2 and my company says NO to in service rollovers and also says I have to be 62 or older or terminate employment to get ANYTHING. Are these ALL rules that the “plan” can set? Are there no rules set by the Govt??? This company is not above lying to their employees. If there is any “law” that mandates the age at 59 1/2 tell me where to find it. Can “the plan” set the age for accessing ones 401 K any where they want ???? Thank you.

  39. Bailey on June 20th, 2010 12:37 pm

    I have a current 401K, it is held by Hewitt Associates i am currently employed by KOCH induistries and they said that i can take a loan but i can’t roll out a large chunk in to a self directed IRA. I am surprised that they can do that!!!! That is my investment and i have to pay a maintanence fee on that account. I only want to remove half of the account ballance and purchase Real Estate with the funds and hold the property in a LLC IRA, is there any hope that i can change there mind on this or force them to allow me to take this action?????? Thanks Mike……

  40. Lynn on June 23rd, 2010 6:32 am

    If you belong to a company 401k plan and then become an “Excluded Employee” from the plan. What happens to your account?

    I became an Excluded Employee (because I went to work with a foreign affiliate of my company) and was given an 30-day mandatory option to rollover my 401k funds. I rolled in over into an IRA (under my control, much happier and doing so much better!).

    . . . and a year land four months ater I returned to the states, rehired with the U.S. Affiliate and now the plan administrator says they made a mistake and want all the money back, plus earnings. Do I have to? I don’t want to.

    Even though a Direct Rollover was done, I am willing to pay the taxes and penalties if I am allowed to keep the money. fully vested money. 15 years on the job.

  41. Bruce Peterson on June 28th, 2010 3:11 pm

    Most of the questions here can be answered at the US Dept of Labor Do NOT make the mistake of not being informed and trying to undue a bad decision. You have rights and as long as you approach these problems with verified answers, you should be OK! With all of the turmoil in the economy and fluctuations of the market, it is very hard for some workers to see the 401K’s lose value and not be concerned. The best thing to do is check with your employer, see if you can do better with your own individual plan, but if you get a denial, tell them you want an inservice withdrawal. Just make sure you rollover to an IRA and fund it with your choice of financial products. Otherwise you will have a diminished retirement. If you just want the cash out, be prepared for the penalties for early withdrawal, IRS form filing, and yes additional taxes.
    Only as a very very last resort should you cash out for day to day expenses.

  42. Olga Flores on July 16th, 2010 11:35 pm

    I left one employer and put the check from the 401K to Traditional IRA CD and I would like to add money, but I was told by someone that if I contribute to my current employers 401K I cannot contribute to the IRA CD that I opened. The reason I did not roll it into the my current 401K is because at the time I received the check I had not been with my current employer for one year. I was told I could not roll it into my current 401K

  43. LoryK on August 6th, 2010 12:16 pm

    I want to close out or get distribution of my 401k safe harbor plan at age 64, still employed but on medical leave of absence. Is this an option for withdrawal of all funds?

  44. Brian on August 9th, 2010 6:29 pm

    We should change the law then to let people decide what to do with their own money. Sure, charge the appropriate penalty, but as adults, we should be allowed to make our own choices even if the “experts” don’t agree! Last time I checked I thought we were in a free country, even if that leads to a mistake. How patronizing and arrogant these 401k admins are to think they know better than we do as to what we do with our own money. What it is is just a scheme to force people into investing and not allowing them to change their mind so that the fat cats on Wall St can keep sucking us dry like leeches! I know we have a choice of joining or not and stopping our contributions, but when you have a pile of your own money sitting there and they say you are not allowed to have it, it pretty much stinks.

    Here is another goofy part of the rules, you can take the money out to pay for college. Whoop-de-do. Most people going to college are not employed and thus have no 401k to draw from, and those that do have one, are employed and thus out of college. Another catch-22, typical gov.t nonsense!
    Anyway, let’s change the law to make it USER friendly!

  45. kathleen hignutt on November 22nd, 2010 7:43 am

    i was wondering if i needed money for my house i was wondering if i could withdrAW from my 401k

  46. lyle lewis on December 24th, 2010 6:57 am

    i have all my retirement funds in my companys 401k plan in a traditional 401k and i manage my own account by choice its an option we have my question is we also have a roth in our plan can i take my balance and transfer all my funds to my roth and take my tax hit now or do you actually have to leave your employer

  47. Holly on February 7th, 2011 12:21 pm

    I contribute to my current employers 401k with a 5% match and although it has been doing well over the past couple of years, I am considering reducing my contribution to the 401k to about half and trading the remainder on Scott trade. Would this be a bad decision? I have done very well trading on Scott trade as a hobby over the past year…

  48. CHarles on March 16th, 2011 1:24 pm

    By law, it is allowed to rollover your 401k to traditional IRA. You could find such regulation on IRS.gov.

    Why does Financial company reluctant to do that? managment fee.
    Every year, the financial company will charge 0.8-1.5% fee. If you have asset value at 100k in your 401k account, financial company will get $1000/year. Yes, per year.

    Why does your former employer reluctant to do that? cash back by Financial company
    A lot of financial company would give about 0.1-0.5% back to employer. If there are 100 employees, for each employee, there are about $100k, the employer will will get 100*100k*0.005=50k/year.

    All the money that Financial company and employer got is from employee. So you need rollover it as soon as you left the company.

    It is against law that your employer does not allow you to rollover.

  49. elvis on March 17th, 2011 5:27 pm

    is there a way to rollover my 401k to my spouse 401k plan?

  50. doug on April 20th, 2011 8:43 am

    I just turned 59 and half .I lost my job dp to an injury at work It required that I use my F.M.LA to hold my job ,but I had to have a second surgery to complete the full cure for me to return to work at week 13 my boss shows up at my residence and ask for my company vehicle my credit cards ,he stated that the company had to replace the position and I lost my job and the company stopped paying me my 60% weekly benifit checks and stop approval on my medical . I was told to use my group insurance and had to borrow from my 401 k just to make ends meet . I hired an attorney because this injury happened at work .My job was really strenuous travel to my jobs were 70 miles from my home and the company did not pay any driving time actually my time started when I arrived at my frist job and ended when I finished my calls most of the time I got up at 4 am and got back home at 6 to 8 pm every night and I did find that I was exhausted all the time. does this sound like I,m being unresonable to ask for reinburstment for my injury and not to mention I still have unpaided medical bills from this. I ,m looking for work now and this type of work is easy to find but it.s a young persons job so can you draw for a 401 account at 59 and a half and if so do you have to have 20% helded out for the goverment.

    DEEPLY CONCERNED INDIVIDUAL

  51. DJ Gott on April 22nd, 2011 2:27 pm

    I am currently doing In-Service withdrawals of after tax money into my Roth IRA. The 401k company I’m with says it’s legal to do so. I’m trying to get a more concrete ruling on this. Thanks, DJ

  52. Debbie on April 25th, 2011 1:50 pm

    My husband will be 59 1/2 in July. His employer 401K is not extremely large, less than $50,000. He also has a pension with his employer and will be eligible for Social Security upon retirement. Legally, can we withdraw the 401K funds to pay off debt, if the plan administrator allows in service withdrawal?

  53. Tommy K. on September 13th, 2011 4:20 am

    I still have no answer if my employer stops contributing to my 401K…….4 years with no contributions, is this a qualifying event that will allow me to rollover my 401K to a tax defered IRA.

  54. Clark H. on September 30th, 2011 8:16 pm

    I am working for an employer who has frozen their contributions to their employee 401K. Can I do a direct transfer of my 401K funds to my existing personal 403b and essentially close out my 401K account being it doesnt look like my employer is going to contribute to it anytime in the forseeable future.

  55. kingsuperdad on November 8th, 2011 6:54 pm

    I’ve only started researching this topic for personal reasons. Thanks to all who have contributed substance to this thread.

    Something I’ve noticed that doesn’t appear to be mentioned already – it appears if you want to know if a publicly traded company allows in-service withdrawals from their 401(k) or other retirement plan you can check the internet for 10-K (or possibly the 8-K) filing with the SEC.

    http://www.investopedia.com/terms/1/10-k.asp

  56. kingsuperdad on November 8th, 2011 6:59 pm

    correction on my previous post: I typed 10-K but I meant 11-K

  57. Sally on November 21st, 2011 5:20 pm

    Today Nov of 2011 at 62, I want to take an inservice withdrawal (it is allowed) of $430k from my 401k..roll it to my IRA. I plan on retiring in April of 2012, can I roll over the remaining approx $72k at that time?

  58. Alan on January 31st, 2012 10:52 am

    Interesting article…I didn’t know you were allowed 401k rollovers :-) (at least not prohibited by law).

  59. Brian on February 8th, 2012 1:13 pm

    I am the CEO but our plan is administered by CUNA Mutual. They state that they can allow in-service distributions of employer contributions, but not of the employees’ salary deferrals (other than for hardship, 59 1/2). They state there position is per “statute”, yet can not produce such statute. The plan documents do not expressly state that the in-service distribution is limited to employer contributions, but that in-service distributions are limited to employees having participated in the 401K for a minimum of 5 years.

    Can anyone produce the specific regulation (if it exists) that prohibits the in-service distribution of employee salary deferrals from their 401K?

    The reason for wanting to do this is that CMG charges employees’ 401K 1.15% administration fees. That’s a lot of money. It would be better to roll over all funds from a 401K to a Vanguard traditional IRA which has no administration fee for accounts with a minimum of $10k. I would like to retain the 401K plan as it allows for higher salary deferrals and employer contributions.

  60. Jeff on February 26th, 2012 1:21 pm

    I’m not saying this would work, but hypothetically what about doing a 401K rollover to an IRA by the following process:

    1) withdraw money from your 401K. Your employer can not stop you, but will withhold taxes and/or penalize you from making contributions.

    2) In less than 60 days, deposit what is left after taxes into an IRA, along with your own money to make up the taxes they withheld. In other words, deposit into an IRA in less than 60 days from the withdrawal an amount the same as the original 401K withdrawal.

    3) On your next tax return, claim the combination of the 401K withdrawal and subsequent deposit to IRA under 60 days as a non taxable distribution, and get the withheld tax money back.

  61. JW on March 3rd, 2012 6:23 pm

    I’m amazed at the confusion out there!
    I’ve been told that I can do an in-service rollover/distribution to my own IRA, although I’m still working for the company and I’m 44 years old. I’ve been with the company for 24 years, and am completely vested.

    Then I’ve been told that I cannot do such a thing, even though my plan allows for in-service withdrawal, until I reach age 59 1/2.

    Who is telling the truth?

    I just want to have great flexibility in my investment choices and be able to seek an active manager that can help me.

    I don’t understand why there is so much confusion.

  62. Eddie Smith on April 12th, 2012 10:28 am

    I have not read all of the posts, so I’ll ask a question. I just rec’d a statement from my 401K( employee-funded only), and I noticed that no money was contributed for the past quarter, even though money is deducted bi-monthly form my paycheck. 1) Is this permissable, and if not, do I have any recourse? 2) Can I take the funds or assets out and transfer to another IRA without penalty? I ask this because this isn’t the first time, nor second time, and I feel I am losing the Gains( and I realize the losses) when the money is not put in to my investments in a timely manner.

  63. JP on April 15th, 2012 2:38 pm

    HELLO, ALL. I AM PRESIDENT OF A COMPREHENSIVE FINANCIAL PLANNING FIRM (INDEPENDENTLY AFFILIATED WITH ONE OF THE LARGEST BROKERAGES IN THE COUNTRY), WHO HAS DEDICATED THE ENTIRETY OF MY EXPERTISE ON RE-EDUCATING THE MIDDLE CLASS ON THE FUNDAMENTALS OF FINANCIAL PLANNING, FEE-FREE, FOR THE LOVE OF HUMANITY. NOT BEING A CAPTIVE AGENT HAS ENABLED ME TO LEARN ABOUT THE BEST PRODUCTS & SERVICES IN THE INDUSTRY, REGARDLESS OF THE COMPANY THAT OFFERS IT. MY LOYALTY IS TO MY CLIENTS, ALWAYS — FINDING THE BEST PRODUCTS TO COINCIDE WITH THEIR COMPREHENSIVE FINANCIAL GOALS & DREAMS IS WHAT DRIVES ME. I TEACH FINANCIAL BASICS & ESSENTIALS ON MY BLOG, ENTITLED: WEATHERING THE BOOMER RETIREMENT: FINANCIAL PLANNING SURVIVAL GUIDE — GOO.GL/DKNQJ. I BELIEVE IN EMPOWERING OTHERS WITH RE-EDUCATION ON THE A-Z OF MONEY. IT IS AN ASPECT OF LIFE THAT IS SO OFTEN MISUNDERSTOOD & MISATTRIBUTED, TO THE POINT OF STAYING A MYSTERY TO THE MASSES.

    THIS TOPIC OF DISCUSSION COULD NOT BE MORE IN MY WHEELHOUSE, SO I WILL ENDEAVOR TO RESPOND TO AS MANY QUESTIONS AS POSSIBLE. I ALSO LECTURE AROUND THE COUNTRY TO TEACH COMMUNITIES & SCHOOLS THESE FUNDAMENTALS OF FINANCIAL PLANNING, PRO BONO. I HAVE TRAINED/MENTORED/TAUGHT AGENTS AT A NUMBER OF FORBES’ MOST ADMIRED COMPANIES IN THE INDUSTRY. I HAVE COVERED THIS TOPIC IN ONGOING WORKSHOP SERIES, PARTICULARLY. CURRENTLY, I HAVE A PRIMARILY CELEBRITY-PHILANTHROPIST CLIENTELE BASE, WHOSE NON-PROFIT ORGANIZATIONS & BUSINESS PLANNING I MANAGE, PRIVATELY. WE SIMPLY MET ON THE SAME PATH. MY BUSINESS IS 100% REFERRAL-BASED. I DO NO ACTIVE MARKETING, I HAVE NEVER BOUGHT A LEAD IN MY LIFE, & I FEEL PRIVILEGED TO HAVE THE OPPORTUNITY TO GROW OLD WITH MY CLIENTS.

    I AM NOT HERE TO SELL ANYTHING. I AM HERE TO HELP, I AM HERE TO LEARN, I AM HERE TO SHARE, I AM HERE TO TEACH. I AM PASSIONATE ABOUT WHAT I DO & HOW I DO IT, I WEAR MY HEART ON MY SLEEVE — EVEN WHEN I WORK. I DO THE KIND OF WORK THAT LENDS ME TO FEEL PROUD TO MIX MY BUSINESS WORLD WITH MY PERSONAL LIFE. I DO INDEED HAVE A VERY PROUD MOM, WHO IS ALSO A CLIENT. :-)

    ——————————————————————————————————-

    LET’S CLARIFY THIS INFORMATION FOR POSTERITY, SO THAT WE ARE ALL ON THE SAME PAGE. OFFICIALLY. 100% OF MY WORK ENTAILS THE REVIEW OF A COMPREHENSIVE FINANCIAL PLANNING ASSESSMENT. WITHOUT IT, I CAN ONLY GIVE EDUCATED GUESSES. IN ORDER TO BEST SERVE ANY CLIENT, I WANT TO SEE THE FULL SCOPE/SCALE OF HIS/HER FINANCIAL GOALS. MY CLIENT & I GO THROUGH A PROCESS OF DRAWING THE BLUEPRINTS FOR A SOLID, FINANCIAL HOUSE, ONE THAT REFLECTS WHERE HE/SHE IS TODAY, WHERE HE/SHE WANTS TO BE, & THE NEXT PLANS OF ACTION TO GET HIM/HER FROM POINT “A” TO POINT “B.” WITH THAT SAID, AS OF A FEW YEARS AGO, AFTER I VIEWED THE FRONTLINE DOCUMENTARY, I FELT INSPIRED TO SHIFT MY FOCUS TO PINPOINT ONE AREA, EXPRESSLY: HELPING PEOPLE REBUILD THEIR RETIREMENT PLANS AFTER SUFFERING SOME VERY SOBERING REALIZATIONS THAT THE 401(K) WAS NEVER WORTHY. YOU DESERVED BETTER ANYWAY. NOW, WE HAVE CHANCE TO GET IT RIGHT.

    ——————————————————————————————————-

    …TAX CATEGORY TERMS…

    TAX “NOW” — FILED IN ANNUAL TAX RETURN
    TAX-DEFFERED = TAX “LATER” = QUALIFIED
    TAX-ADVANTAGED = TAX “NEVER” = NON-QUALIFIED

    ——————————————————————————————————-

    …ROLLOVERS — GENERAL OVERVIEW…

    ROLLOVERS:
    MOVING MONEY FROM ONE ACCOUNT/PRODUCT TO ANOTHER ACCOUNT/PRODUCT THAT USUALLY (BUT NOT 100% OF THE TIME — FOR REASONS THAT ARE NOT RELEVANT FOR THIS PARTICULAR REVIEW — I DO NOT WANT TO COMPLICATE THINGS) FALL WITHIN THE SAME TAX CATEGORY. TYPICALLY, THE FUNDS GO FROM THE OLD COMPANY TO THE NEW COMPANY AFTER DOZENS OF PAGES OF FORMS (SOME OF WHICH HAVE TO BE SUBMITTED AS ORIGINALS), COMPLETED VIA ELECTRONIC TRANSFER, OR BY CHECK. THE OLD COMPANY PAYS THE MONEY “TO THE ORDER OF” THE NEW COMPANY & SENDS THE CHECK TO YOU — WHICH YOU WOULD THEN FORWARD TO THE NEW COMPANY. WHEW! THERE IS A WHOLE LOT OF PAPER-PUSHING, PAPER TRACKING (& PAPER CUTS–HA!) IN THIS PROCESS.
    DURATION OF ROLLOVERS — THE WORST CASE SCENARIO: THIS PROCESS WILL MOVE AT THE SPEED OF MOLASSES (& USUALLY DURING A TIME WHEN CLIENTS COULD NOT FEEL A MORE COMPELLING SENSE OF URGENCY ABOUT IT GETTING IT DONE).

    FYI ON DURATION OF ROLLOVERS:
    THE TIME IT TAKES TO DO A ROLLOVER IS INORDINATELY & EPICALLY LENGTHY. IF YOU CALL A COMPANY & ASK ABOUT THE TIME-FRAME FOR THESE TRANSACTIONS, YOU WILL UNDOUBTEDLY GET THE STANDARD, “OH, WE GET THINGS DONE AT THE SPEED OF LIGHT” ANSWER. OF COURSE. PLEASE. THE TRUTH IS THE PROPENSITY OF THE COMPANY HOLDING THE MONEY TO INTENTIONALLY STALL THE PROCESS IS USUALLY THE PIVOTAL FACTOR THAT DETERMINES THE TIME IT TAKES. MUCH TO MY CHAGRIN, I HAVE NOT COME ACROSS MANY COMPANIES THAT WERE IN ANY PARTICULAR HURRY TO RELEASE MONEY. THERE ARE ALWAYS EXCEPTIONS TO THE RULE, BUT OVERALL, IT TAKES A LOT LONGER THAN COMPANIES WILL EVER ADMIT & A LOT LONGER THAN CLIENTS COULD EVER ANTICIPATE.

    ROLLING OVER IN THE SHADE:
    SOME COMPANIES WILL RELEASE THE MONEY JUUUUST SHY OF EXCEEDING THE LEGAL LIMITS OUTLINED BY THE U.S. DEPARTMENT OF LABOR’S EMPLOYEE RETIREMENT INCOME SECURITIES (ERISA) ACT OF 1974. THIS GIVES THE PLAN ADMINISTRATOR 30 DAYS TO COMPLY UPON RECEIPT OF A WRITTEN REQUEST FOR THE TRANSFER OF FUNDS. NON-COMPLIANCE IS A FEDERAL OFFENSE. PAST THOSE 30 DAYS, YOU HAVE CAUSE OF ACTION TO SUE THE COMPANY FOR FAILING TO FOLLOW THROUGH ON ITS FIDUCIARY DUTY. THE PLAN ADMINISTRATOR CAN BE HELD PERSONALLY LIABLE FOR DAMAGES, WHEREIN, THEY HAVE BEEN ORDERED TO PAY $100 FOR EVERY, ADDITIONAL DAY THAT THE MONEY WAS NOT RELEASED. http://www.dol.gov/dol/topic/retirement/erisa.htm

    DURATION OF ROLLOVERS — THE BEST CASE SCENARIO:
    IF THE SHENANIGANS FROM THE HOLDING COMPANY ARE KEPT AT A RELATIVE MINIMUM, IT CAN RAMP ALL THE WAY UP TO THE RIVETING PACE OF A TORTOISE. I KNOW. I AM NOT EVEN KIDDING. THE TIME TO START THE PROCESS IS NOW.

    THE UNDERLYING ISSUE:
    WE ALL KNOW THAT THE 401(K) IS A RISK-ORIENTED PRODUCT. YOU DO NOT HAVE A SAFE-GUARD FOR LOSS ON THIS PRODUCT. IF YOU CANNOT AFFORD TO LOSE MONEY, YOU WERE NOT SUITED FOR A PRODUCT THAT ONLY OFFERS RISK-ORIENTED STRATEGIES, WOULDN’T YOU AGREE? MANY PEOPLE DID NOT REALLY KNOW BETTER, IT WAS NOT THEIR JOB TO DETERMINE THAT ANYWAY (IT WAS THE FINANCIAL PLANNER’S JOB). PEOPLE MOST ENTHUSIASTICALLY POURED THEIR HARD-EARNED MONEY INTO THESE PLANS, ASSUMING THE BEST. AS TIMING WOULD HAVE IT, WE HAVE FOUND OURSELVES ON THE BRINK OF MAKING HISTORY, AS THE MARKET EXPERIENCES FLUCTUATIONS DUE TO UNPREDICTABLE & UNPRECEDENTED EVENTS, WHAT WITH THE BABY BOOMERS RETIRING & THE TRILLIONS OF DOLLARS THAT HAVE TO BE MOVED FROM THEIR TAX-DEFERRED ACCOUNTS AT 59.5 & BY AGE 70.5. THIS NEARLY 80 MILLION-STRONG GENERATION HAS NEVER DONE ANYTHING THAT DID NOT AFFECT ALL OF US. PERIOD. THEY MAKE UP THE MAJORITY. SO IMAGINE WHAT VERY UNCERTAIN TIMES ARE UPON US, WHERE THE MAJORITY DOES RETIRE, OR THE MAJORITY CANNOT RETIRE (BECAUSE SO MANY HAD 401(K)’S THAT FAILED THEM AT THE TIME THEY NEEDED IT MOST). IT IS THE LAST GENERATION TO RECEIVE THE LION’S SHARE OF SOCIAL SECURITY BENEFITS (PROJECTED TO END IN 2032), BUT ALREADY, NO ONE HAS NEEDED IT MORE THAN THEY DO. MORE POWER TO THEM.

    THE PROPOSED SOLUTION, MOVING FORWARD:
    THE MOST EFFECTIVE REMEDY FOR THIS EPIDEMIC OF CONDITIONED POVERTY OF KNOWLEDGE IS THE POWER OF RE-EDUCATION, THE HOPE OF DOING THE BEST WE CAN WITH WHAT WE HAVE, OPTIONS TO DO RIGHT BY OUR LOVED ONES, THE PROTECTION OF SELF-ASSUREDNESS, & THE PEACE OF MIND THAT YOU HAVE BEEN GIVEN THE TOOLS TO MANEUVER THE COURSE — & WIN. THE FOUNDATION OF YOUR FINANCIAL PLAN MUST BE TO SECURE THE FUNDS YOU NEED TO COVER THE LIKELY & FORESEEABLE COSTS OF LIVING. YOU HAVE A DOLLAR FIGURE THAT REPRESENTS THE AMOUNT OF YOUR RECOMMENDED/PROJECTED GOAL FOR RETIREMENT SAVINGS, EVEN IF YOU DO NOT YET KNOW WHAT THAT NUMBER MAY BE. EVERYONE HAS A SPECIFIC FIGURE THAT COMES FROM WEIGHING IN A VARIETY OF DIFFERENT FACTORS, CALCULATING THINGS LIKE THE RATE OF INFLATION, & BASED ON THEIR PERSONAL FINANCIAL DREAMS & GOALS. BUT ABOVE ALL & BEFORE ANYTHING ELSE, LEARN THAT RETIREMENT NUMBER SO THAT YOU CAN FOCUS ON BUILDING FOR IT. PLEASE DO NOT SHOOT IN THE DARK ABOUT HOW MUCH TO SAVE. SAVING ENOUGH TO STAY RETIRED IS NOT SOMETHING YOU WANT TO GUESSTIMATE. THE POSSIBILITY OF RETIREMENT DOES NOT HAVE TO BE A SURPRISE.

    THE CONCLUSION — WE CAN MAKE THE BEST OF IT:
    I PERSONALLY FEEL LIKE THE 401(K) WAS THE WORST THING THAT HAS EVER HAPPENED TO THE BABY BOOMERS & TO THE MIDDLE CLASS FOR THE RISK-ORIENTED QUALITIES, ALONE. ON TOP OF THAT, IT COULD NOT HAVE ENSUED MORE HAPHAZARDLY. ALL I HAVE TO DO IS LOOK AROUND TO FIND PROOF OF DISSATISFIED “USE TO BE” HOPEFUL RETIREES. DO NOT WAIT UNTIL YOU ARE DESPERATE TO MOVE THE MONEY, IN ORDER TO MOVE ON IT (IF YOU CAN HELP IT). NO MATTER WHAT, THIS PROCESS TAKES SOME TIME. DOING A ROLLOVER WHILE THE MARKET TANKS (& YOU ARE IN A PANIC TO DO IT VERY QUICKLY) WILL NOT ONLY STRESS YOU OUT, IT WILL AGE YOU, & ALTOGETHER THAT IS ILL-ADVISED. AS THEY SAY, “PROCRASTINATION IS THE MOST EXPENSIVE “NATION.”

    ——————————————————————————————————-

    …ROLLOVERS FOR ACTIVE (CURRENT EMPLOYER-SPONSORED) 401(K) PLANS…

    —–ROLLOVER TO ANOTHER QUALIFIED (TAX-DEFERRED) PLAN WITHOUT *NON-HARDSHIP, FREE, IN-SERVICE ROLLOVER* OPTION SPECIFIED PLAN:
    CAN IT BE DONE? NO.

    —–ROLLOVER TO ANOTHER QUALIFIED (TAX-DEFERRED) PLAN WITH *NON-HARDSHIP, FREE, IN-SERVICE ROLLOVER*OPTION SPECIFIED IN PLAN:
    CAN IT BE DONE? YES! MOST DEFINITELY. :-) I HAVE A LIST OF HUNDREDS OF COMPANIES (PROPRIETARY/INTERNAL) THAT ALLOWS THIS OPTION.

    —–NOTE:
    IF YOU ARE NOT SURE IF YOUR COMPANY’S 401(K) PLAN PERMITS *NON-HARDSHIP, FREE, IN-SERVICE ROLLOVERS*, ASK YOUR PLAN ADMINISTRATOR, OR ASK YOUR FINANCIAL PLANNER TO CONTACT YOUR PLAN ADMINISTRATOR (SHOULD YOUR PLAN ADMINISTRATOR DEMONSTRATE A LESS THAN HELPFUL SPIRIT ABOUT IT) TO INQUIRE ON YOUR BEHALF. GENERALLY, NO COMPANY IS PARTICULARLY THRILLED ABOUT ENABLING YOU TO MOVE MONEY OUT OF IT. DO NOT TAKE IT PERSONALLY IF YOUR ADMINISTRATOR IS NOT FORTHRIGHT. OF COURSE, THAT DOES NOT MAKE HIS/HER BEHAVIOR LEGAL OR ACCEPTABLE, IT JUST PREPARES YOU TO EXPECT THE POSSIBILITY THAT YOU KNOWING THE LAW BETTER THAN HE/SHE DOES CAN ONLY GIVE YOU STRENGTH. http://www.irs.gov/Retirement-Plans/Plan-Sponsor/401(k)-Resource-Guide—Plan-Sponsors—General-Distribution-Rules

    DO NOT ALLOW HIS/HER BAD ATTITUDE TO IMPEDE OR INTIMIDATE YOU FROM ASKING EVERY QUESTION YOU WANT TO ASK. STAND YOUR GROUND & GET THE INFORMATION YOU NEED. GETTING SOME PEACE OF MIND ON YOUR LIVELIHOOD IS MORE VALUABLE THAN TRYING NOT TO STEP ON HIS/HER TOES. AFTER ALL, HE/SHE IS NOT GOING TO REIMBURSE YOU FOR ANY LOSSES THAT CAME FROM YOUR LACK OF KNOWLEDGE ABOUT THE. NOW THAT EMPLOYEES CAN SUE THEIR EMPLOYERS FOR EXORBITANT MANAGEMENT FEES (ERISA), FOR EXAMPLE, IT ONLY RELIEVES A COMPANY OF POSSIBLE LIABILITY IF THEY EDUCATE EMPLOYEES ABOUT WHETHER OR NOT THE PLANS OFFER THE OPTION OF *NON-HARDSHIP, FREE, IN-SERVICE ROLLOVERS*.
    IN MY EXPERIENCE, I HAVE SEEN COMPANIES BLATANTLY LIE, GIVE CLIENTS THE RUNAROUND, & DO ALL SORTS OF OBVIOUSLY RIDICULOUS & PAINFULLY UNDERHANDED THINGS IN ORDER TO DELAY THE PROCESS OF RELEASING MONEY. THIS, OF COURSE, MAKES THE PROCESS NOT ONLY MORE TIME-CONSUMING, BUT INCREDIBLY IRKSOME. DURING A NON-CRISIS MODE ROLLOVER CLIMATE, IT IS BARELY TOLERABLE. BUT DOING ROLLOVERS IN 2009, FOR EXAMPLE, WOW—-THERE IS NO DOUBT THAT THIS INDUSTRY IS DUE FOR AN INFUSION OF MORALITY, COMPASSION, GOOD FAITH, DUE DILIGENCE, & INTEGRITY. THE NEXT TIME THE MARKET TANKS, I AM GOING TO HAVE A FILM CREW DOCUMENT THE SHEER, UNSPEAKABLE MADNESS ON THE INSIDE. SAVAGE.

    ——————————————————————————————————-

    —–ROLLOVERS FOR OLD 401(K)’S, CURRENT IRA’S (EVEN IF THEY WERE ORIGINALLY OPENED AS IRA’S), ROTH IRA’S, ETC.
    ALL ROLLOVER-FRIENDLY. MOST DEFINITELY. THE PENALTIES INCURRED IN THE PROCESS VARY FROM COMPANY TO COMPANY & FOR EACH PRODUCT, SPECIFICALLY. IN MY EXPERIENCE, THESE PENALTIES HAVE BEEN NEGLIGIBLE, BUT ALL OF THAT MUST BE DISCUSSED IN CONJUNCTION WITH A COMPREHENSIVE LOOK AT YOUR FINANCIAL PLANS & GOALS. I TRANSACT MANY OF THESE ROLLOVERS FROM RISK-ORIENTED PRODUCTS TO THOSE THAT ELIMINATE THE RISK, ALTOGETHER, THAT ALSO MAXIMIZE THE “UPSIDE” POTENTIAL. NO LOSS GUARANTEED PRODUCTS WITH FLEXIBILITY FOR CONTINUED CONTRIBUTIONS = CLOUD NINE.

    ——————————————————————————————————-

    …WITHDRAWALS (CONDITIONS & LIMITATIONS)…

    WITHDRAWALS:
    DISTRIBUTIONS, TAKING OUT THE MONEY, PAYING THE APPLICABLE TAXES. NOT A LOAN. NOT PAID BACK.

    —–WITHDRAWAL WITH HARDSHIP:
    CAN IT BE DONE? YES, BUT IT DEPENDS. HERE IS FINRA’S EXPLANATION:http://www.finra.org/investors/protectyourself/investoralerts/retirementaccounts/p039023

    Under certain circumstances, it may be possible to access your 401(k) funds before retirement. Check with your employer for the specifics of your plan. A hardship withdrawal should be a choice of last resort. You will never get the full amount that you withdrawal because you will have to pay taxes.

    Hardship withdrawals generally are:

    Available if your employer’s plan permits them, but are not required by law;
    Not loans—they cannot be repaid;
    Subject to regular taxes—your employer will likely deduct 20% up front;
    Subject to a 10% penalty tax if you are not 59 ½ or older;
    Available only after you have withdrawn all other available 401(k) funds;
    Not available after you have been terminated.

    Hardship withdrawals are allowed to:

    Purchase or repair a primary home;
    Pay education tuition, room and board, and fees for the next 12 months for you, your spouse, children, and other dependents;
    Prevent eviction or foreclosure on your primary residence;
    Address severe financial hardship;
    Pay for unreimbursed medical expenses for you, your spouse, children and other dependents;
    Pay for funeral expenses for immediate family members—parents, spouse, children, and other dependents.

    The 10% penalty tax is waived if your hardship withdrawal results from:

    Your total and permanent disability;
    Medical bills that exceed 7.5% of your adjusted gross income;
    A court order to pay funds to a spouse, child or dependent;
    Permanent lay off, termination, quitting or early retirement in the same year you turn 55.
    Permanent lay off, termination, quitting or retirement accompanied by payments for the rest of your (or your designated beneficiaries’) life or life expectancy that continue for at least 5 years or until you reach age 59 ½, whichever is longer.

    Hardship withdrawals are costly in the short term when you pay taxes. Over the long term, they also cost you when the withdrawn funds are not there to grow with the help of compounding.

    ADDITIONALLY, HERE IS THE IRS FAQ ON HARDSHIP DISTRIBUTIONS: http://www.irs.gov/Retirement-Plans/Retirement-Plans-FAQs-regarding-Hardship-Distributions

    ——————————————————————————————————-

    ….WITHDRAWAL WITHOUT HARDSHIP…
    CAN IT BE DONE? NO. IRS LAWS APPLY. IF THE PLAN DOES NOT INCLUDE THAT OPTION, IT DOES NOT HAVE A LEGAL OBLIGATION TO DO SO. YOU MAY ACCESS AS THE IRS ALLOWS: EARLIEST AT AGE 59.5 & LATEST AT AGE 70.5 (AT LEAST IN TERMS OF TAKING REQUIRED MINIMUM DISTRIBUTIONS, OR YOUR MONEY WILL BE SUBJECT TO AN ADDITIONAL TAX — EXCISE TAX).

    ——————————————————————————————————-

    …RESPONSES, REBUTTALS, COMMENTS…

    —–HOWARD—–
    CLINT IS CORRECT. TAXES, EXPRESSLY, DO NOT PLAY A FACTOR UNLESS YOU ARE WITHDRAWING MONEY, OR IN SOME CASES, WHEN MOVING MONEY FROM ONE TAX CATEGORY TO ANOTHER TAX CATEGORY. ROLLING MONEY FROM ONE TAX-DEFERRED (TAX “LATER”) PLAN TO ANOTHER TAX-DEFERRED (TAX “LATER”) PLAN IS NOT TAXABLE. PLEASE BEAR IN MIND, HOWEVER, THAT THE IRA IS NOT THE ONLY OPTIONAL RECEPTACLE. YOU ARE IN ANY CASE, ONLY SUBJECT TO PENALTIES SPECIFIED IN YOUR PLAN. I KNOW OF HUNDREDS (LITERALLY) OF COMPANIES THAT ALLOW FOR FREE ROLLOVERS OF THIS NATURE. SOME OF THE COMPANIES ON THE LIST ARE VERY WELL-KNOWN FORTUNE 500 FIRMS. WHICH IS TO SAY THAT BEING ABLE TO DO AN IN-SERVICE ROLLOVER IS NOT AS ESOTERIC & AS EXCEPTIONAL AS PEOPLE WOULD LIKE TO BELIEVE. I EAT, SLEEP, LIVE, & BREATHE THESE TRANSACTIONS BECAUSE I AM TRYING TO REHABILITATE THE RETIREMENT DREAMS THE 401(K) EFFECTIVELY SQUASHED. I COME ACROSS MORE COMPANIES THAT DO ALLOW THESE DISTRIBUTIONS THAN THOSE THAT DO NOT. THANK GOD. BECAUSE WHAT WOULD WE HAVE EMPLOYEES DO WHEN THE MARKET TANKS AGAIN? FORCE THEM TO TERMINATE THEIR EMPLOYMENT, TO SAVE THEIR RETIREMENT NEST-EGG, OR SHALL WE WITNESS THE AGONY OF PEOPLE HANGING ON BY A THREAD? AN ENCORE? UGH. NO MORE.

    SO MANY OF THESE 401(K) VICTIMS WERE IN THE BABY BOOMER GENERATION. I THINK ABOUT THE HISTORY OF THIS GENERATION’S IMPACT ON THE WORLD & THE WAYS THIS GROUP MOVED HUMANITY FORWARD. THEY HAD THE MOST TIME TO SAVE THE MOST MONEY, SO THEY LOST THE MOST MONEY IN THE END. OUR VALUES MUST BE SO BACKWARD THAT SOMEHOW, WE DRAFTED EVERY GREAT STRIDE THEY MADE, LET THEM BREAK CEILINGS & OPEN DOORS FOR US, THEN SOLD THEM A LEMON TO DRIVE TO RETIREMENT…? IS IT JUST ME? THIS INDUSTRY NEVER CEASES TO APPALL ME. “IF WE HAVE NO PEACE, IT IS BECAUSE WE HAVE FORGOTTEN THAT WE BELONG TO EACH OTHER.” -MOTHER THERESA

    —–GRET—–
    401(K)’S & IRA’S ARE TAX-DEFERRED/TAX “LATER”/”QUALIFIED PRODUCTS. ROTH IRA’S ARE TAX ADVANTAGED/TAX “NEVER”/NON-QUALIFIED PRODUCTS. THOSE TAX CATEGORIES ARE ASSIGNED TO THE PRODUCTS BEFORE YOU EVEN PUT A DIME INTO THE ACCOUNT. NOT ALL PRODUCTS ARE NATURAL RECEPTACLES FOR OTHERS. THERE IS A RHYME & REASON FOR ROLLING MONEY FROM ONE PRODUCT & INTO ANOTHER WITHOUT HAVING TO JUMP THROUGH HOOPS TO DO SO. THE MONEY YOU SAVE IN YOUR 401(K) SHOULD REPRESENT THE AMOUNT THAT REMAINS AFTER YOU HAVE SUFFICIENTLY SET ASIDE ENOUGH TO COVER YOUR DEBTS & COSTS OF LIVING. YOU MAY VERY WELL BENEFIT FROM DOING A COMPREHENSIVE FINANCIAL PLAN, IN ORDER TO DEVISE A PLAN OF ACTION. I CANNO DEFINITIVELY GIVE ANY ADVICE UNTIL I SEE THE FULL PICTURE. OTHERWISE, IT WOULD BE LIKE GIVING YOU MEDICATION FOR ONE AILING PART OF YOUR BODY, BEFORE HAVING ANY IDEA OF THE CONDITION OF THE REST OF YOUR BODY. LET ME KNOW IF I CAN HELP YOU ALONG THE WAY.

    —–LAMONT—–
    YOUR INFORMATION IS NOT ENTIRELY CORRECT. BEING ABLE TO ROLL AN ACTIVE/IN-SERVICE 401(K) IS NOT A UNILATERAL ALLOWANCE THAT EVERY 401(K) PLAN FACILITATES. PLEASE REFER TO THE DIFFERENT SCENARIOS DISCUSSED IN MY EXPLANATION, ABOVE.

    —–LAMONT & BRIAN KELLY—–
    I USED TO BE WITH NYL (RECRUITED CROSS-COUNTRY TO BE UP FOR PARTNER IN ONE OF THE LARGEST TERRITORIES IN THE COMPANY). I WAS HIRED AT A CONTRACT LEVEL THAT ALLOWED FOR TRANSACTING OUTSIDE BUSINESS, BUT I WAS STILL CONSIDERED A CAREER AGENT OF NYL. I KNOW NYL’S PRODUCTS, INSIDE & OUT. I AM NOT THERE, NOW, BUT MY BROKERAGE OFFERS NYL, SO THE OPTION TO USE NYL’S PRODUCTS HAS REMAINED ON THE TABLE. STILL, EVEN WHILE I WAS AT THE COMPANY, I COULD NOT BELIEVE HOW MUCH OUTSIDE BUSINESS I HAD TO WRITE FOR SIMPLY BEING ABLE TO FIND MUCH MORE SUITABLE PRODUCTS THAT GARNERED MY CLIENTS SIGNIFICANTLY MORE GAINS (VARIES BY STATE — SUBJECT TO THAT CONSIDERATION) WITH OTHER VERY REPUTABLE COMPANIES’ PRODUCTS & SERVICES. I ONLY WORK WITH A-RATED COMPANIES, SO IT IS NOT AN ISSUE OF NYL’S SOLVENCY SETTING IT APART IN THIS INSTANCE. WHICH IS TO SAY WITH ALL DUE RESPECT, IF YOU ARE OPEN TO SEEING SOME OPTIONS OUTSIDE OF NYL’S PRODUCTS, THERE IS ONLY LEARNING, PERSPECTIVE, POTENTIALLY SOME MONEY SAVED, & TIME SPARED THAT CAN COME FROM GETTING A SECOND OPINION, GENTLEMEN. ANYWAY, I WISH YOU BOTH THE BEST IN YOUR ENDEAVORS & HOPE THINGS WORK OUT BEAUTIFULLY FOR YOU, EITHER WAY. PLEASE FEEL FREE TO CONTACT ME IF YOU HAVE ANY QUESTIONS, AS ENABLING A PERSON TO MAKE MORE INFORMED FINANCIAL DECISIONS IS THE MOST REWARDING PART OF MY WORK & MY PRIMARY OBJECTIVE. THANK YOU. :-)

    —–BRIAN KELLY—-
    I AM SORRY THAT YOU WENT THROUGH SO MUCH, SIMPLY TO GATHER SOME ANSWERS ABOUT WHERE YOUR WIFE’S 401(K) STANDS. UNFORTUNATELY, YOUR STORY IS ONE THAT SO MANY PEOPLE CAN RELATE TO — BEING BRUSHED OFF, JOB SECURITY BEING THREATENED, BEING LED ON A WILD GOOSE-CHASE, ETC. THIS INDUSTRY HAS SCARED PEOPLE FROM WANTING TO LEARN MORE…FOR CENTURIES. DO NOT ALLOW ANYONE TO BULLLY YOU FROM SEEKING ANSWERS YOU HAVE EVERY LEGAL RIGHT TO KNOW. PEOPLE HAVE BEEN CONDITIONED TO STAY UNINFORMED TO PRESERVE THEIR JOB SECURITY. IT IS NOT ONLY UNLAWFUL, BUT THE COMPANY SABOTAGES ITSELF BY BEHAVING THIS WAY. I COULD HAVE SENT YOUR EMPLOYER AN ENDLESS LIST OF LAW SUITS, WHEREIN, COMPANIES HAVE BEEN SUED FOR LOSSES IN EMPLOYEES’ 401(K) PLANS (FEES), IN ADDITION TO SUITS FILED/WON AGAINST COMPANIES FOR NOT BEING FORTHRIGHT ABOUT PLAN INFORMATION, WHEREIN THE PLAN ADMINISTRATORS ARE HELD PERSONALLY LIABLE FOR DAMAGES.

    PLAN ADMINISTRATORS, OF COURSE, WILL NOT BE PLEASED ABOUT ANY MONEY MOVING OUT OF THEIR ACCOUNTS BECAUSE THEY HAVE BEEN MAKING A LOT OF MONEY OFF OF THESE PLANS, WHETHER THE PLANS MAKE MONEY OR LOSE MONEY, THEY GET PAID THEIR MANAGEMENT FEES. HOLDING YOUR WIFE’S MONEY HOSTAGE IS NOT REMOTELY ON THE LEVEL. THEY WILL END UP PAYING FOR IT. LITERALLY. IT IS A CONTRIVED ATTEMPT TO FORCE THIS WEAK PLAN OF ACTION TO APPEAR REMOTELY INTACT, WHEN TRULY IT STARTED OUT BROKEN IN THE FIRST PLACE. LET ME KNOW HOW ALL OF THAT GOES. I WILL HELP YOU IN ANY WAY I CAN.

    —–LAMONT & DAVE—–
    YES, OF COURSE, THERE IS SUCH A LIST. LAMONT, WHY WOULD YOU ABSOLUTELY ASSUME THAT NO ONE IN THIS INDUSTRY WOULD TAKE THE TIME TO COMPILE A LIST LIKE THIS? I HAVE A LIST. IT IS PROPRIETARY. DAVE, IF YOU SEND ME A LIST OF SOME COMPANIES YOU ARE INTERESTED IN, I WILL INDICATE WHICH ONES OFFER THIS OPTION IN THEIR 401(K) PLANS.

    —–MARTI T—–
    NO, BUT I MAY WRITE ONE, MYSELF. :-) SORRY FOR NOT BEING OF IMMEDIATE HELP TO YOU.

    —–GERALD—–
    YOU GOT THE “BRUSH OFF” ANSWER. TRY, TRY AGAIN. EMAIL SO THAT YOU CAN KEEP A PAPER TRAIL (PHYSICAL EVIDENCE — WHEN YOU ARE INTERACTING WITH ANYONE IN THIS INDUSTRY, COVER YOUR “ASSETS,” JUST IN CASE.). ASK YOUR PLAN ADMINISTRATOR IF YOUR PLAN ALLOWS FOR HARDSHIP DISTRIBUTIONS. THEN ASK IF THE PLAN ALLOWS FOR “IN-SERVICE NON-HARDSHIP DISTRIBUTIONS,” SPECIFICALLY. PLEASE FEEL FREE TO FOLLOW UP WITH ME ONCE YOU HAVE GOTTEN THE ANSWERS.
    HAVING FLEXIBILITY & MORE OPTIONS IS NOT TOO MUCH TO ASK. THESE THINGS SHOULD BE DISCUSSED & EXPLORED WITH YOU. A DIALOGUE SHOULD BEGIN BETWEEN YOU & YOUR FINANCIAL PLANNER. YOU ALSO DESERVE AN ANNUAL REVIEW TO CONTINUE TO CONFIRM THAT ALL OF THE WAYS YOUR MONEY FLOWS REFLECTS A CORRESPONDENCE WITH YOUR CURRENT GOALS/DREAMS. YOU ALSO SHOULD HAVE A REVIEW AFTER ANY MAJOR LIFE CHANGES OCCUR, BE IT GETTING MARRIED, HAVING A CHILD, BUYING A HOME, LOSING A JOB, ETC.

    IN RESPONSE TO MATTHEW’S RESPONSE TO YOU, YOUR EMPLOYER’S CONTRIBUTIONS ARE NOT MANDATORY, SO THAT CANNOT BE THE ONLY REDEEMABLE QUALITY IN YOUR DECISION TO KEEP THE 401(K) AS YOUR ONLY RETIREMENT VEHICLE. COMPANIES STOP MATCHING MONEY AS THEY SEE FIT. & REALLY, WHAT GOOD DOES MATCHING ANY AMOUNT OF MONEY DO IF THE PLACE WHERE YOU PUT THAT MONEY CANNOT RELIABLY PROMISE YOU A SINGLE DIME WHEN YOU RETIRE? 401(K) MONEY IS THIS CRUEL JOKE TO ME AT THIS POINT: ONE THAT TAKES REAL MONEY & TURNS IT INTO THE POSSIBILITY OF REAL MONEY, THEN TURNS IT INTO THE THEORETICAL PROBABILITY OF MONEY. PUTTING ALL OF YOUR EGGS IN AN IMAGINARY BASKET IS A MESS WAITING TO HAPPEN.

    THE 401(K) IS, IN ACTUALITY, A RETIREMENT SUPPLEMENT. SUPPLEMENT — SOMETHING IN ADDITION TO THE PRIMARY VEHICLE. WHY? BECAUSE IT IS A RISK-ORIENTED PRODUCT. LOGICALLY, WE MUST SECURE WHAT WE NEED & KEEP THAT SAFE FROM LOSS BEFORE WE CAN POSITION MONEY IN OTHER TYPES OF FUNDS. A GENERAL RULE OF THUMB: IF YOU CANNOT AFFORD TO LOSE IT, IT IS VERY LIKELY THAT YOU WERE NOT SUITED FOR IT — & AT THE VERY LEAST, IT MEANS YOU NEED TO TALK TO SOMEONE ABOUT IT, WHO WILL EXPLAIN THE BUILDING BLOCKS/PROCESS OF COMPREHENSIVE FINANCIAL PLANNING VERSUS THIS “WHAM! BAM! THANK YOU, MA’AM! & LOSE MY NUMBER!” 401(K) PLAN EXECUTION/MANAGEMENT. IF EMPLOYEES WERE TAUGHT THIS INFORMATION INSTEAD OF SOLD SOME ILLUSION OF SECURITY, THAT WOULD ACTUALLY BE EVIDENCE THAT THIS INDUSTRY DOES CARE ABOUT THE WELL-BEING OF PEOPLE. INSTEAD, TIME & TIME AGAIN, IT EXHIBITS EVIDENCE OF THIS SCARCITY MENTALITY WHERE “SURVIVAL OF THE FITTEST” MEANS “WATCH DECENT PEOPLE LIVE IN A CONSTANT STATE OF UNCERTAINTY/STRESS ABOUT THEIR FINANCIAL SECURITY.” IT IS TRUE WHAT GANDHI SAID, “WE MUST BE THE CHANGE WE WANT TO SEE IN THE WORLD.”

    ON A SIDE NOTE, THERE ARE OTHER OPTIONS BESIDE THE ONES YOU MENTIONED, HERE THAT DO NOT HAVE THE CONTRIBUTION LIMITATIONS OF EITHER THE 401(K) OR THE IRA.

    AS I DISCUSS IN MY BLOG, PLEASE BE MINDFUL THAT THIS INDUSTRY CAN OFTEN OPERATE IN A STATE OF AN ETHICS FREE-FOR-ALL, NEGLIGENCE, & DETACHMENT FROM FEELING COMPASSION FOR HUMANITY. FRAUD IS COMMONPLACE, NOT ONLY ON THE CLIENT LEVEL, BUT ON THE AGENT LEVEL (GETTING ROBBED FROM THE INSIDE). NOTHING IS SACRED IN THIS INDUSTRY, CLEARLY, NOT EVEN ITS OWN. WELL, ACTUALLY, THIS INDUSTRY WORSHIPS MONEY. THAT IS ABOUT IT. IT IS A “DOG EAT DOG” WORLD WHERE CANNIBALISM IS JUST RAMPANT, BUT BEHIND CLOSED DOORS. BUT A “COME OUT IN A SUIT, TALKING ABOUT GOING TO CHURCH WITH HIS WIFE & KIDS ON SUNDAY” KIND OF PLACE. THAT IS NOT AN EXAGGERATION OR A RARITY. IT IS SIMPLY SOMETHING PEOPLE WHO WORK IN IT MUST ENDURE BECAUSE SUING FOR BEING DEFRAUDED MAKES YOU UNTOUCHABLE BY THE REST OF THE INDUSTRY. WIN THAT MONEY IN COURT & CHOOSE A DIFFERENT CAREER, OR TAKE THE FINANCIAL HIT, MIND THE LESSON LEARNED FROM IT, & CONTINUE TO CREATE BETTER WAYS TO SERVE YOUR CLIENTS WITHOUT ENDURING IRREPARABLE DAMAGE IN THE PROCESS. WHAT A BALANCING ACT. IT IS AMAZING THAT DOING THE RIGHT THING WHEN NO ONE IS LOOKING IS ACTUALLY SOMETHING ANYONE WOULD HAVE TO FIGHT THE GOOD FIGHT TO DO.

    SO 100%, THERE ARE INCREDIBLY SHADY CHARACTERS IN THE MIX. THE VERY FEW & FAR BETWEEN WHO ARE NOT SHADY WILL NOT MIND GOING THROUGH THE SAME PROCESS OF “GUILTY UNTIL PROVEN INNOCENT” SCREENING. IN FACT, I AM SO PROUD OF PEOPLE WHEN THEY DO THAT. BE TOUGH! ALWAYS PROCEED WITH YOUR GUARDS UP. THERE ARE PLAN ADMINISTRATORS OUT THERE WHO ARE HONEST, THEY DO THEIR JOB WITHOUT AN ISSUE WITH ANSWERING QUESTIONS, THEY ARE FORTHRIGHT ABOUT WHAT IS ALLOWED, ETC. I WISH MORE PLAN ADMINISTRATORS WERE LIKE CHRIS. UNFORTUNATELY, THE ONES THAT ARE NOT LIKE CHRIS ARE SO ON THE OTHER SIDE OF THE SPECTRUM, IT KNOCKS THE BEARINGS FROM ANYONE WITH EVEN A MODEST EXPECTATION OF PROFESSIONAL INTEGRITY. THESE PLAN ADMINISTRATORS DO NOT LIE (ABOUT NOT BEING ALLOWED TO SEND A BLANK FORM BY EMAIL, FOR EXAMPLE — TRUE STORY) BECAUSE IT IS LOGICAL OR RIGHT, THEY DO IT BECAUSE THEY CAN. THEY DO NOT LIE ABOUT NOT HAVING GOTTEN THE FEDEX THAT CONTAINED THE REQUEST FOR FUNDS TRANSFER FORM…HEAR ME TELL THEM WHO SIGNED FOR IT…THEN IMMEDIATELY SAY THEY DID GET IT) BECAUSE IT IS ANYTHING REMOTELY ON THE PLANET OF “THE RIGHT THING TO DO.” THEY DO IT BECAUSE SADLY, MOST OF THE TIME. THEY GET AWAY WITH IT. THEY HAVE…& THEY DO, EVERY DAY. BUT NOT ON MY WATCH. I CAN TELL YOU THAT.

    —–NATE—–
    I HAVE BROWSED ARTICLES ON THE INTERNET TO GET AN IDEA OF WHAT MY CLIENTS HAVE TAUGHT THEMSELVES (SO THAT I CAN RE-EDUCATE THEM & EMPOWER THEM WITH ACCURATE INFORMATION). IT IS DIFFICULT TO TELL WHAT LANDS, WHEN SO MUCH OF WHAT IS OUT THERE IS NOT ACCURATE. DO NOT BELIEVE EVERYTHING YOU READ IN ARTICLES. DO NOT BELIEVE EVERYTHING YOU READ IN THIS THREAD. I WENT THROUGH MOST OF THE ANSWERS & A LOT OF THEM ARE NOT ENTIRELY ACCURATE. GO TO THE ACTUAL GOVERNMENT/FINANCIAL SITES TO FORTIFY THE FUNDAMENTALS OF YOUR FINANCIAL KNOWLEDGE. IF YOU KNOW THE LAWS THAT GOVERN FINANCIAL SERVICES PRODUCTS, FIRST, LEARNING ABOUT DIFFERENT COMPANIES’ PRODUCTS BECOMES A PIECE OF CAKE. I READ SENATE BILLS, IRS CODES, & ALL OF THE FINE PRINT I CAN GET MY HANDS ON. I STUDY ALL ASPECTS OF THIS WHOLE INDUSTRY, I EVEN PREPARE FOR TESTS I KNOW I DO NOT EVEN HAVE TO OR WANT TO TAKE — BECAUSE YOU DO NOT KNOW WHAT YOU DO NOT KNOW. THE BEST SERVICE COMES FROM THE CONFIDENCE OF KNOWING THAT IT IS TRULY EXCEPTIONAL BY ANY MEASURE/STANDARD. THE EDUCATION IS ONGOING BECAUSE THIS INDUSTRY IS EVER-CHANGING. IT HAS TO BE. I THINK IT IS FANTASTIC THAT YOU HAVE TRIED TO LEARN ON YOUR OWN. THE INITIATIVE IS NOTEWORTHY & I HOPE YOU FIND THE INFORMATION YOU SEEK ON THE GOVERNMENT SITES THAT I HAVE PROVIDED, ABOVE. :-)

    —–JOE—–
    THERE IS NO ACCIDENT ABOUT HOW VAGUE, CONFUSING, INCONSISTENT EVERYTHING SEEMS TO BE. THIS IS NOT A COINCIDENCE, BY ANY MEANS. IT IS SAD TO SAY, BUT HOW COULD IT BE? THIS INDUSTRY MAKES SO MUCH MONEY FROM VERY CAREFULLY MARKETING ONLY THE HIGHLIGHTS OF A PRODUCT & TO PEOPLE WHO WOULD NOT KNOW WHAT QUESTIONS TO ASK TO PROTECT THEMSELVES IN THE FIRST PLACE. THIS IS NOT NEWS. THIS IS NOT ABOUT CONSPIRACY THEORIES. IT IS WHAT IT IS. WE ALL KNOW IT. SO I AGREE WITH YOU — IT SHOULD NOT BE THIS ARDUOUS TASK TO SIMPLY FIND OUT MORE INFORMATION ABOUT SOMETHING THAT WAS PRESUMED TO BE TRANSACTED IN GOOD FAITH. THE MORE EVASIVE & “SUSPECT” PLAN ADMINISTRATORS GET ABOUT MERELY BEING ASKED TO PROVIDE INFORMATION ABOUT THE PLANS, ACROSS THE BOARD, THE MORE I AM CONVINCED THAT THEY KNEW IT WAS A BUST WHEN THEY SOLD IT.

    —–MARIA—–
    THE BEST PLACE TO START IS TO CONTACT THE PLAN ADMINISTRATOR FROM THE FIRM WITH WHICH HE HAD THE 401(K). LET THE PLAN ADMINISTRATOR KNOW THAT YOUR DAD PASSED AWAY & THAT YOU NEED HIM/HER TO WALK YOU THROUGH THE PROCESSES OF TRACKING DOWN HIS ACCOUNT. BEING DIRECTED TO THE PROPER CHANNELS SHOULD BE STRAIGHT-FORWARD FROM THAT POINT. PLEASE FEEL FREE TO CONTACT ME IF YOU HAVE ANY QUESTIONS. I HAVE PERSONAL EXPERIENCE WITH INHERITED IRA’S & WILL GLADLY SHARE WHAT EVER INFORMATION I CAN WITH YOU. I AM SORRY ABOUT YOUR LOSS. GOD BLESS YOU.

    —–LYNN B—–
    I UNDERSTAND YOUR FRUSTRATION & AS A MATTER OF FACT, I HAVE GEARED MY WHOLE CAREER ON FIGHTING THIS FIGHT FOR US ALL. THIS PREDICAMENT IS OUTLANDISH. I WILL SPEAK TO YOUR PLAN ADMINISTRATOR FOR YOU, IF YOU WISH. FEE-FREE. EVERYTHING I DO IS FEE-FREE, OR I DO NOT DO IT AT ALL. I FIGURE, HOW MUCH HARDER COULD THIS INDUSTRY MAKE IT FOR THE GENERAL PUBLIC TO SIMPLY LEARN THE FUNDAMENTALS FOR BASIC SURVIVAL?? HOW MUCH MORE CAN INDUSTRY PROFESSIONALS MAKE THAN ALREADY BEING PAID TO MOVE MONEY?? I DO NOT WANT TO ADD TO THE SUFFERING IN THIS WORLD ANY MORE THAN I WANT TO CREATE OBSTACLES IN OTHER PEOPLE’S LIVES. I AM AT YOUR SERVICE.

    —–MIKE MONTGOMERY—–
    MENTIONING THE TERM *NON-HARDSHIP, FREE, IN-SERVICE ROLLOVERS” DOES NOT AUTOMATICALLY INFER THAT THOSE FUNDS WILL BE ROLLED INTO IRA’S. THEY CAN BE MUTUALLY EXCLUSIVE. THAT IS MOOT. GIVING HER A FRIENDLY HEADS UP CAME FROM A GOOD PLACE. I APPRECIATE THAT. SHE DOES, HOWEVER, NEED TO KNOW THAT THE TERM *NON-HARDSHIP, FREE, IN-SERVICE ROLLOVERS” DOES NOT INFER ANYTHING “BAD”, THAT NOT ALL IRA’S ARE “BAD”, THAT THERE ARE OTHER PRODUCTS THAT CAN FIT THE BILL THAT ARE NOT IRA’S, ETC.

    —–EDWARD ARAMBULA—–
    NO ONE WOULD BE ABLE TO RELIABLY GIVE YOU ADVICE OF THAT NATURE ON THIS SITE, IN THIS FORUM, FOR PUBLIC CONSUMPTION, WITHOUT KNOWING MORE INFORMATION ABOUT YOU…WHICH WOULD THEN INFRINGE ON YOUR RIGHT TO CONFIDENTIALITY. THERE ARE CHECKS & BALANCES TO RENDER SUCH SPECIFIC FINANCIAL ADVICE. WITH THAT SAID, NO MATTER WHAT, YOUR FIRST ACT OF SAVING MONEY HAS TO BE THAT OF GETTING A COMPREHENSIVE FINANCIAL PLAN THAT LAYS OUT YOUR FINANCIAL DREAMS & GOALS. YOU ESSENTIALLY NEED THE BLUEPRINTS — IT IS A BUILDING PROCESS.

    —–TODD—–
    YOUR EMPLOYER DECIDING NOT TO CONTRIBUTE DOES NOT HAVE A BEARING ON WHETHER OR NOT THESE FUNDS ARE ELIGIBLE FOR A ROLLOVER. PLEASE KINDLY READ MY NOTES AT THE TOP. I BROKE IT ALL DOWN. :-)

    —–ROB—–
    THE LAW IS ON YOUR SIDE. FORTUNATELY, IT IS NOT AS COMPLICATED AS YOU HAVE ANTICIPATED. IT IS BLACK & WHITE. THE LAW IS THE LAW. YOU CAN ROLL YOUR 401(K) WHEN THE COMPANY HAS OFFICIALLY TERMINATED YOUR EMPLOYMENT. THE PLAN ADMINISTRATOR WILL CONFIRM YOUR EMPLOYMENT STATUS. ONCE THAT IS DONE/CONFIRMED/CLEAR, YOU MUST SUBMIT A FORM THAT INDICATES THAT YOU WANT TO ROLLOVER YOUR MONEY PRIOR TO THE HOLDING PERIOD THEY ARE DIRECTED TO IMPOSE — WITHOUT A PROBLEM. ALL STANDARD. YOU ARE FREE TO DO THE ROLLOVER FOR YOUR “OLD” 401(K) INTO A QUALIFIED PRODUCT, FOR EXAMPLE. AS I SAID IN MY RESPONSES, IT IS OF UTMOST BENEFIT TO YOU IF YOU HAVE AN UPDATED/RECENT COMPREHENSIVE FINANCIAL PLAN TO REVIEW. THE DUE DILIGENCE OF CONFIRMING THAT THE DIRECTION YOU WISH TO GO WITH THIS ACCOUNT IS THE MOST SUITABLE FOR YOU AT THE PRESENT TIME IS THE KIND OF INFORMED DECISION-MAKING THAT WILL CONTINUE TO PROVIDE YOU WITH PEACE OF MIND. & THERE ARE MOST DEFINITELY ALTERNATIVES TO THAT OF THE TRADITIONAL IRA. WITHOUT DOUBT. TAKE TIME TO EXPLORE THE POSSIBILITIES.

    —–JAY—–
    DITTO. SHOW ME THE IRS CODES. :-)

    —–DEBBIE—–
    TO CLARIFY: YOU LEFT THE COMPANY, SPENT 8 MONTHS NOT EMPLOYED WITH THE COMPANY, YOU DID NOT ROLLOVER YOUR 401(K), YOU WENT BACK TO THE COMPANY & YOU WERE REHIRED. DURING THE 8-MONTH PERIOD, WHEREIN, YOU WERE NOT EMPLOYED BY THIS COMPANY, THE COMPANY DID NOT MOVE YOUR FUNDS. WHEN YOU WERE REHIRED, THEY SIMPLY CONTINUED TO ADD TO YOUR 401(K) AS THOUGH THERE WERE NO OFFICIAL POINT OF TERMINATION? DID YOU DO ANY PAPERWORK THAT PERTAINED TO THE 401(K), WHEN YOU GOT REHIRED? EVEN IF IT WAS NOT THE PACKET YOU MAY HAVE GOTTEN THE FIRST TIME YOU ENROLLED, DO YOU REMEMBER FILLING OUT A FORM OF ANY KIND? IF SO, WHAT DID THAT PAPERWORK ENTAIL?

    —–DADDY—–
    I AGREE. DIVERSIFICATION IS GREAT, IF THE PROCESS ENTAILS A SPECIFIC ORDER OF PRIORITIES. THE ISSUE IS THAT MOST PEOPLE DO NOT KNOW THE SEQUENCE OF BUILDING A SOLID, FINANCIAL PLAN. OFTEN TIMES, THEY HAVE POCKETS OF MONEY IN VARIOUS PLACES, SIMULTANEOUSLY, & INVESTED RATHER RANDOMLY. & REALLY, I UNDERSTAND. PEOPLE ARE DOING THEIR BEST WITH THE LIMITED/CONFLICTING INFORMATION THEY HAVE, BUT THAT JUST MEANS THEY DESERVE TO BE FORTIFIED WITH BETTER INFORMATION & MORE OF IT…& FREE. WOULD IT BE ANYTHING LESS THAN TRULY REMARKABLE FOR OUR COUNTRY IF PEOPLE WERE SIMPLY GIVEN BETTER TOOLS, MORE RESOURCES, & RELEVANT INFORMATION? I WOULD LOVE TO WITNESS A MASS OF PEOPLE DOING THE BEST TO WIN TOGETHER. WHAT A MORALE BOOST FOR OUR COUNTRY & JUST WHAT WE NEED TO OFFSET THE “FINANCIAL CANCER” THE 401(K) ENDED UP BEING.

    —–RANDY—–
    YOU ARE OLDER THAN 59.5 & YOU WANT TO ROLL YOUR QUALIFIED PLAN INTO ANOTHER QUALIFIED PLAN. THE 5 YEAR RULE IS FOR ROLLING EMPLOYEE RETIREMENT PLANS & OTHER QUALIFIED PLANS INTO NON-QUALIFIED PLANS LIKE ROTH IRA’S. THE AGE 62 LIMITATION DOES NOT APPLY TO YOU. PLEASE READ ABOUT IT IN FURTHER DETAIL USING THE IRS LINK PROVIDED, BELOW. READING ONLY MY SUMMARIZATION OF THE IRS CODE IS NEVER ENOUGH BECAUSE IT IS IN THE SPECIFICITY OF ANY OF THESE LAWS, WHEREIN, YOU WILL TRULY PINPOINT YOUR LEVERAGE & RIGHTS. :-) YOUR PLAN ADMINISTRATOR, HOWEVER, NEEDS TO READ UP ON HER/HIS IRS LAWS. FOR SHAME. http://www.irs.gov/publications/p590/ch02.html#en_US_2011_publink1000231036

    —–BAILEY/MIKE—–
    I THINK WE CAN ALL RELATE TO HOW YOU FEEL. I AM SORRY THAT THIS SITUATION SEEMS TO FEEL UNJUST, BUT IT IS IMPORTANT FOR YOU TO NOTE THAT THE SAME LAWS THAT DO NOT ALLOW YOU TO BORROW FROM YOUR 401(K) TO OPEN AN IRA ALSO PREVENT PEOPLE FROM LAUNDERING MONEY. IT IS A MATTER OF HONORING THE FUNDAMENTALS OF THE FLOW OF MONEY. WHEN YOU BORROW THAT MONEY FROM YOUR 401(K), PAYING IT BACK SHOULD BE YOUR FIRST FINANCIAL OBLIGATION BEFORE YOU ARE IN A POSITION TO CREATE ANY NEW ACCOUNTS. NEW ACCOUNTS DEMONSTRATE AN EXCESS OF DISCRETIONARY FUNDS. IN AN INDUSTRY THAT USES A NOMINAL MEASUREMENT OF SUITABILITY TO SUPPORT ITS ADVICE TO CLIENTS (& ESSENTIALLY, TO RELIEVE THEMSELVES OF LIABILITY IN THE INSTANCE THEIR ADVICE LEADS TO LOSSES), THAT PROCESS IS SOLELY BASED ON ONE FACTOR: DETERMINING WHETHER OR NOT YOU CAN AFFORD TO OPEN, MAINTAIN, & SUSTAIN THE ACCOUNT IN CONSIDERATION. IF YOU HAVE TO BORROW IT TO CREATE IT, THE ANSWER IS “NO.” I DO, HOWEVER, ENCOURAGE YOU TO CONSIDER OTHER VIABLE OPTIONS. YOU MAY HAVE MORE FLEXIBILITY THAN YOU KNOW. LET ME KNOW IF YOU NEED FURTHER GUIDANCE.

    —–OLGA FLORES—–
    ON THE PERSPECTIVE OF SOLELY ANSWERING THE QUESTION AS TO WHETHER OR NOT IT IS LEGAL/POSSIBLE TO DO: YES, YOU CAN DEFINITELY CONTRIBUTE TO YOUR 401(K) & YOUR IRA (FACTORING IN ALL IRS LIMITATIONS FOR THE YEAR FOR EACH, RESPECTIVELY). I COULD NOT DETERMINE WHETHER OR NOT THAT WOULD BE THE MOST SUITABLE & VIABLE FINANCIAL PLAN OF ACTION FOR YOU & FOR COUNTLESS REASONS — BECAUSE THERE ARE FUNDAMENTAL STEPS OF GATHERING FACTS & FIGURES THAT MUST BE CONSIDERED IN CONJUNCTION WITH HONORING YOUR FINANCIAL DREAMS & GOALS. WHICH IS TO SAY, THE TIMING IN “THE WHY” IN FINANCIAL PLANNING IS THE FACTOR THAT DETERMINES “THE WHAT,” “THE HOW MUCH,” & “THE WHERE.”

    —–BRIAN—–
    I AM DEFINITELY WORKING ON CHANGING THE LAW TO MANDATE THAT ALL PLANS ALLOW *NON-HARDSHIP, FREE, IN-SERVICE ROLLOVERS* BECAUSE GETTING TOTALLY BLIND-SIDED BY THE UTTER DISAPPOINTMENT OF THE 401(K) WAS “HARDSHIP” ENOUGH FOR THIS WHOLE COUNTRY…FOR ETERNITY. GOOD GRACE, SO MANY PEOPLE ARE SUFFERING OVER THIS DISGRACE. THE PEOPLE WHO MADE THE MONEY BY SUBJECTING YOU TO THE LOSS CONTINUE TO MAKE MONEY BY LOSING YOUR MONEY. ENOUGH IS ENOUGH. ALLOWING ANOTHER MARKET DIP TO WIPE OUT THE HOPE OF RETIREMENT FOR A COUNTRY FULL OF PEOPLE CANNOT BE THE “LIFE LESSON” THAT COMES OF TRANSACTING BUSINESS IN GOOD FAITH.

    THE INDUSTRY KNEW THIS PRODUCT WAS WAY ABOVE PEOPLE’S HEADS TO MANAGE EFFECTIVELY, AS EARLY AS 2006, WHERE THERE WAS A FRONTLINE PIECE CALLED “CAN YOU AFFORD TO RETIRE?” (WATCH THE FULL PROGRAM, ONLINE) STATISTICS STACKED ONTOP OF STATISTICS TO FORECAST HOW THINGS WOULD UNFOLD IN YEARS TO COME. THE FORECAST WAS GRIM. LOW & BEHOLD, EVERYTHING TURNED OUT AS DISASTROUSLY AS THE PIECE CAUTIONED. I SAW THIS COMING & I DID SOMETHING ABOUT IT. I DID EVERYTHING I COULD TO DO SOMETHING DIFFERENT. I ENDEAVORED TO GIVE THE MIDDLE CLASS & THE BABY BOOMERS THE EXPERT CARE THAT I GAVE MY VERY HIGH NET WORTH CLIENTS. I DID NOT DO IT BECAUSE IT FELT LIKE CHARITY. I DID IT BECAUSE IT WAS A MATTER OF HUMAN DECENCY. & OF COURSE, THERE IS THE FACT THAT WHEN THE BABY BOOMERS EXPERIENCE ANYTHING, THEY AFFECT THE REST OF US, SIMPLY BY THEIR MASS. IF THE BABY BOOMERS WERE HEADED FOR A REALLY TUMULTUOUS RETIREMENT WAKE-UP CALL, I COULD NOT IMAGINE LIFE NOT SUCKING FOR US ALL. IF I CAN HELP IT, I WILL HELP IT. SIMPLE AS THAT. SO I DID. & I AM.
    MY GREATEST HEARTACHE IN THIS INDUSTRY WAS WHAT I FOUND WHEN I SPENT YEARS SEARCHING FOR OTHER PEOPLE WHO WERE TRYING TO CREATE SOLUTIONS BEFORE THE DIP IN 2009. THERE WAS NO ONE, REALLY. PEOPLE DO NOT BELIEVE WHAT THEY DO NOT WANT TO BELIEVE. IT TOOK THREE YEARS AFTER THE LAST DIP TO GET PEOPLE TO ENTERTAIN THE IDEA THAT GOING THROUGH ANOTHER LOSS LIKE THAT MAY END UP TRULY AFFECTING THEIR HEALTH. IT HAS ALREADY AFFECTED THE QUALITY OF LIFE. THE PEOPLE IN THIS INDUSTRY WERE ONLY INTERESTED TO RIDE IT OUT, MAKE AS MUCH MONEY OFF OF IT WHILE THEY COULD, & THEY WERE PARTICULARLY INTERESTED TO LEARN HOW I HAVE MAINTAINED A 100% REFERRAL-BASED CLIENTELE. I CAN ANSWER THAT. BECAUSE I MUST BE DOING SOMETHING RIGHT & IT MUST BE FROM A GOOD PLACE. IMAGINE THAT. :-) IT IS NOT A MYSTERY. IT IS NOT SOME SALES & MARKETING SECRET THAT COMES WITH CLEVER WAYS TO TALK IN CIRCLES. NO. IT IS NONE OF THAT. IT IS SIMPLY THAT I GIVE A DAMN.

    SO WHAT DID THE INDUSTRY DO AFTER PEOPLE LOST INCREDIBLE AMOUNTS OF MONEY? THEY DID NOT DO ANYTHING. THEY KEPT SELLING THE SAME, FAULTY VEHICLE TO EVEN MORE PEOPLE. THE 401(K) IS WHERE A LOT OF FINANCIAL DREAMS & GOALS DIED. HOW ABOUT OFFERING SOME GRIEF COUNSELING FOR EMOTIONALLY & PSYCHOLOGICALLY TRAUMATIZING THE COUNTRY? IF ANYONE THINKS THAT LOSING A THIRD OF THEIR NEST EGG DOES NOT FEEL LIKE REAL PAIN BECAUSE IT IS “JUST MONEY,” THEN THAT IS SIMPLY & CONVENIENTLY UNTRUE. EVERY DOLLAR WE MAKE REPRESENTS THE MOST INVALUABLE GIFT OF TIME SPENT, WORKING WHEN WE COULD HAVE BEEN SPENDING THAT TIME WITH OUR FAMILIES (FOR EXAMPLE). WE MAKE A DECISION TO EXCHANGE TIME FOR MONEY TO SECURE FINANCIAL STABILITY/SUPPORT FOR OUR LOVED ONES. IN ONE WAY OR ANOTHER, THAT MONEY REPRESENTS AN INCOMPARABLE SACRIFICE OF BORROWED TIME & IT COMES FROM EFFORTS & INTENTIONS THAT SPEAK OF GREAT LOVE. SO WHAT DO WE HAVE TO SHOW FOR IT WHEN THE MONEY IS GONE? IT IS NOT “JUST MONEY” AT THAT POINT. THE TRUTH IS, “MONEY” HAS ALWAYS BEEN ABOUT MORE THAN “JUST MONEY.” BUT WE ARE CONDITIONED TO MISUNDERSTAND IT, SO THAT WE CAN CONTINUE TO MISMANAGE IT…SO THAT AN INDUSTRY FULL OF PEOPLE WHO HAVE KEPT THE ANSWERS TO THEMSELVES COULD CONTINUE TO MAKE MONEY FROM KEEPING YOU IN THE DARK…MOVING YOUR MONEY HERE…MOVING YOUR MONEY THERE…MOVING IT AGAIN…BECAUSE I PROMISE YOU, THE SAME INDIVIDUALS RESPONSIBLE FOR GIVING YOU THIS 401(K) TO DEAL WITH WILL NOT HESITATE TO COME AROUND AGAIN TO GET PAID. SCANDALOUS.

    WHEN THEY ARE NOT DOING ALL OF THAT, OF COURSE, THEY ARE VERY BUSY SELLING EACH OTHER TRADE SECRETS ABOUT HOW WELL THEIR OLD DOG SELVES DO OLD TRICKS BETTER THAN ANY OTHER OLD DOG/OLD TRICKS, OR THEY COMPARE RECRUITING NUMBERS, MENTORING NEW DOGS TO WHOM THEY HAVE ALSO TAUGHT THESE OLD TRICKS. IT IS TIME FOR A RE-EDUCATION, THE MIDDLE CLASS DESERVES A BREAK, SHARING SPACE WITH GENERALLY MORE HOPEFUL PEOPLE MAKES LIFE EASIER FOR US ALL, & IT WILL FEEL LIKE THE CRAZIEST NOTION TO PROPOSE TO DO, MYSELF……BUT I AM ALREADY DOING IT. :-)

    ——————————————————————————————————-

    THANKS! HAVE A WONDERFUL DAY. IT WAS A PLEASURE DISCUSSING THIS INFORMATION WITH YOU. I LEARNED A LOT ABOUT HOW MUCH I TRULY NEED TO KEEP DOING WHAT I DO — BECAUSE THERE ARE PEOPLE IN THE WORLD WHO DO GO OUT OF THEIR WAY TO SEEK THE TRUTH. RIGHT ON! :-) I WILL BE SPEAKING/TEACHING, NATIONWIDE, GOING FROM STATE TO STATE TO HELP/RE-EDUCATE THE MIDDLE CLASS/THE BABY BOOMERS. IN NO TIME, MORE & MORE PEOPLE WILL BE REGAINING THEIR BALANCE, REGAINING THEIR BEARINGS, & SAVING MONEY WITH PEACE OF MIND, AGAIN. IT IS A PROCESS OF HEALING. THEY NEED A BOOST, THEY NEED IT UNCONDITIONALLY, & THEY NEED IT FROM SOMEONE WHO HAS BEEN DOING EXACTLY THAT, ALL ALONG.

  64. JP on April 17th, 2012 12:24 am

    P.S.
    ***IMPORTANT CONDITION FOR ALL “NON-HARDSHIP ROLLOVERS” (FOR ALL PLANS) —
    IRS RULING 68-24 — “TWO-YEAR/FIVE-YEAR” RULE, WHICH STATES THAT THE FUNDS HAVE TO HAVE BEEN IN THE PLAN FOR TWO YEARS, OR THE EMPLOYEE HAS TO HAVE BEEN A PLAN PARTICIPANT FOR A MINIMUM OF FIVE YEARS.***

    P.P.S.
    FOR THOSE OF YOU WITH PLANS THAT DO NOT CURRENTLY OFFER “HARDSHIP WITHDRAWALS” &/OR “NON-HARDSHIP, FREE, IN-SERVICE ROLLOVER” OPTIONS, YOUR PLAN ADMINISTRATOR HAS THE AUTHORITY TO AMEND YOUR PLANS, ACCORDINGLY. THIS COMES AS GREAT NEWS FOR SOME & NOT SO GREAT NEWS FOR OTHERS, DEPENDING ON HOW YOU FEEL ABOUT YOUR PLAN ADMINISTRATOR’S PROCLIVITY TO LOOK OUT FOR YOUR BEST INTEREST. NO MATTER — WAY TO RISE TO A PLAN OF ACTION IT!! :-) THE OPPORTUNITY TO ROLL OUT OF THIS PRODUCT COULD BE THE MOST REDEEMING QUALITY ABOUT IT.

    THE IRS ACKNOWLEDGES & ALLOWS FOR THESE CHANGES BY THE PLAN ADMINISTRATORS. YAY. THE U.S. DEPARTMENT OF LABOR’S ERISA ACT IS ALL OVER THE INTEGRITY OF THE PLAN ADMINISTRATOR’S FIDUCIARY DUTY TO YOU. THANK GOD. I AM HAPPY TO PROVIDE SUPPORT/RESEARCH TO ANYONE GOING THIS ROUTE. FEE-FREE, OF COURSE. I WOULD LOVE TO TRACK THESE PETITIONS, NATIONWIDE, ON MY BLOG. THANKS! :-) BEST OF LUCK!!

  65. Skip on April 18th, 2012 6:51 pm

    Question–I am age 75 and still working with a company 401K and plan to work for another year. My plan allows for a in service withdrawal. I want to rollover the funds to my IRA for better investment choices. The bank that has the 401k plan says that I have to RMD the 401K this year. Is this true? I thought a trustee to trustee transfer would not cause an RMD to be triggered until next year from the IRA. What are they talking about.
    Anybody have any ideas?

    Thank You
    Skip

  66. Ryan Nelson on March 2nd, 2013 5:59 am

    Clint,
    Been following this site for a long time now, usually on saturday mornings beginning of the month (today 3-2-2013). Outstanding site full of way too much information. I wish I knew more and had more time to read all your posts and links. Just wanted to say thanks and please keep up the hard work!!!

  67. Jeff on June 8th, 2013 5:48 am

    I have another question, still not finding the answer, I’m 54 years old and have my own self managed IRA and brokerage accounts and a employer 401K. I have found even though employers 401k plans are somewhat fair(better than nothing), especially with a company match, but really suck overall, and take way more money in hidden fees than they should. I want to know if I and my wife can take and roll over our employer run 401ks and transfer funds to our personal IRAs to manage myself. For the past few years our employee run 401ks performed way less than my own investments way way less. Can I do this at 59.5 years or do I have to quit my job. They can’t give me a straight answer at my employer. I just want to rollover not withdraw or take a loan.

    thanks

  68. Jeff on June 8th, 2013 5:59 am

    Sorry guys for my last post, I think I found the answer please disregard. Your site is very helpful

  69. Robin Knight on October 8th, 2013 7:54 am

    I am not a lawyer or finical adviser, so most of this is Greek to me. I am 59 1/2 years old and have been employed at this company for over 8 years. I have been told by the plan administrator that I cannot with draw any funds as long as I am an employee. My question is can I roll most of my 401k to an IRA so that I can withdraw some of it if needed? I do not wish to stop contributing to the 401k plan nor do I wish to completely close it out. I simply wish to withdraw some money so that I can start relaxing a bit. Can anyone give me some advise as to what I can do?

  70. Robert on May 27th, 2014 11:06 am

    I am working as a contractor inside of a refinery. I recently just got hired on with the actual refining company. I have a 401k with about 25,000 in it, and a loan of about 4,000 still left. I need some money to but a new car for the new job. What are my options? I do not want to take out a hardship withdraw. Please help!! Thank you.

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