I feel very fortunate to work for a company that contributes their stock regularly to a profit sharing plan for my retirement. I have never been comfortable knowing, however, that this account will probably always be about 40-50% of my retirement portfolio (my wife and I strive to max out our Roth IRAs and put some into the 401(k) portion of my work's retirement plan when we can). I can not reallocate any of the company stock to anything but a money market account. I can only reallocate into a few other options offered in the 401(k) after I turn 50 (and still only a set percentage of the stock).I had an idea last night to help diversify (at least a small amount) in the meantime. I can get the stock dividends from the plan to be paid out to me in cash vs. having them re-invested into stock. They will be taxed as ordinary income (not qualified dividends and not subject to early withdrawal penalty). I can then re-deposit the money in the 401(k) and invest it how I like (most likely a S&P 500 index fund). Later, I can deduct the contribution when I file and get the taxes I paid on the divendends back.Is there anything I am missing here? My aplogies if this has been discussed in an earlier posting.
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