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Hello and welcome to 2000. I am trying to find an answer to the following question:

Can funds be voluntarily rolled out of a 401K into an IRA?

I know in cases where a minimum bal is not met, a 401K administrator can "require" you to roll your funds out of their plan should one leave the company or their employment be terminated.

But can the move be made voluntarily?

Thanks for the help.

geofarm
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Can funds be voluntarily rolled out of a 401K into an IRA?

I know in cases where a minimum bal is not met, a 401K administrator can "require" you to roll your funds out of their plan should one leave the company or their employment be terminated.


If still employed,
the law does not allow a plan to allow you to withdraw 401(k) dollars until you are at least 59 1/2 years old except for hardship or loans.
Loans have never been eligible for rollover.
There are numerous reasons why you don't want to take a hardship.... not eligible to contribute for 12 months, limited contributions upon restarting...
As of 1/1/2000 the 401(k) contribution portion of a hardship withdrawal is not eligible for rollover.

It is plan specific if a plan allows an in-service withdrawal after age 59 1/2. Most will do so only once you reach normal retirement age.

If terminated from employment,
the plan may force a distribution if your vested balance if less than $5,000. When they are ready to pay you, they will send paperwork asking if you want a rollover or a taxable distribution. You have 30 days to return the paperwork before they make a taxable distribution less 20% withholding. You then have 60 days to rollover the 80% check + 20% withholding (from your back pocket) into an IRA to change it to a nontaxable event.

*Cat
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Thanks Cat. Your comments are appreciated and I'll be more specific on my case.
* I turned 59 in Nov so I'm not quite to the 59 1/2 mark.
* I resigned on good terms (can only have so much fun in 7 years).
* Don't need hardship funds
* 401K is more than $100,000.
* Would like to move some/all of 401K in my IRA to trade for more growth.

Are you saying that possibly when I turn 59 1/2 I can start withdrawing from that 401K without penalty?

Thanks, geofarm
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* Would like to move some/all of 401K in my IRA to trade for more growth

If you terminate employee you have the write to move it. And IMO you should. 401ks don't provide the most advantageious investments opportunities. I see them as a necessary evil, in which we are held captive my trustee and custodian.
IMO move it quickly.
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I'm with you, I want to move it.
But what is not clear is - Since I terminated my relationship with the employer can move the $ in the 401K to an IRA under IRS rules?

geo
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GeoFarmFool writes: But what is not clear is - Since I terminated my relationship with the employer can move the $ in the 401K to an IRA under IRS rules?

Mphipps writes: I don't know why not? Why would you think you could not? Maybe, I have missed something?
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GeoFarmFool: "I'm with you, I want to move it.
But what is not clear is - Since I terminated my relationship with the employer can move the $ in the 401K to an IRA under IRS rules?"


"Terminating the relationship with the employer" is generally a necessary condition to moving the 401-k from that employer, subject to a handful of unusual exceptions that the resident experts can explain.

Regards, JAFO

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