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BGP writes:

<<I understand that since my 401K holds company stock and mutual funds that when I retire, I can elect a lumpsum distribution, rolling over my mutual fund assets from 401K to IRA and taking the stock. Taxes dues on the stock can be based on the cost basis of the stock. When the stock is sold after a year, then cap gain taxes will be due. This difference could be significant.

My question concerns lumpsum distribution definition.

I would like to retire at 55 and take yearly distributions from my 401K until I am 59 1/2 at which time I'd could remove everything from my 401K.

My question is whether after 4 yearly distribution can I pull out all the stock on a cost basis as in LumpSum?>>

A lump sum distribution is one that pays the plan participant the balance to the credit of his/her account within the same tax-year as of the time of the first distribution occurring after a triggering event. The triggering events are death, attaining age 59 1/2 or separation. Your withdrawals from the plan prior to age 59 1/2 would be triggered by your separation. On reaching age 59 1/2, you have a new triggering event. Therefore, I would maintain that provided you take the entire balance remaining at that time, you have a qualifying lump sum distribution.

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