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401(k)s, like regular IRAs, are tax defered - the money that goes into them is before taxes, and what you get out when you eventually take your distribution is taxed at whatever your income tax rate is at the time.

I've never heard of the restriction on the stock that you mention. Some brokerage companies (e.g. Fidelity) offer rollover IRA accounts that allow you to have your assets invested in all different types - mutual funds, stocks, bonds, money markets, etc. One possible reason you couldn't move assets to a rollover "in-kind" would be the case of a mutual fund not available through that company. You'd have to liquidate and transfer the cash. I would
expect the stock of a publicly traded company to be transferable in-kind. If your company is not yet public, they probably could impose whatever restriction they want on transfer of the stock...

Perhaps the restriction on the stock in your 401(k) is part of a vesting plan. When employers provide matching contributions to the account, a vesting period is often imposed. The money they contribute is not completely "yours" until the period expires several years later, with a percentage becoming vested over each year. Perhap the restriction on what you can do with the stock is on the unvested portion?


(Disclaimer: I'm not a financial professional, this is just a lay person's understanding of how it works...)
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