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I tried to scroll through the most rec'd posts to see if I could find anything on this topic if it has already been addressed, but since I couldn't I guess I'll ask it myself.

I saw somewhere and then did some Googling that it is theoretically possible to rollover funds from a current active employer 401k into an IRA. It is not something I had even considered as a possibility, and for me it most likely isn't, but I'd like to get some input on it anyway. I'll actually call Wells Fargo later too, but figured it'd be easier to start with some TMF input. :)

I'm only 36, and I currently have a sizable amount in my company's 401k. I've been with the same company for 13 years now, so I don't have a "former employer 401k".
Now that I've gotten myself started in stocks with joining MDP, and contemplating the new SN, I need funds to truly make decent portfolios in them. And with my current available cash and future monthly available for ongoing contributions for investing, it most likely won't be cost effective to be part of both services.
But if I can somehow transfer most (if not all) of the current balance of my 401k into an IRA, then I would be able to manage the balance myself with my own chosen stocks. And I won't be dependent on the few choices within the 401k, of which I am getting very little return from.
The 401k would therefore remain open & active for my ongoing payroll contributions, but any amount of the balance that is currently in there that I can transfer to an IRA would be extremely beneficial to me.

But, is there ANY options available to someone like me to be able to do this? If it's even possible, what are the various types of penalties or other such things I might have to deal with? As long as the penalties are small enough for me, it may be worth it in order to get the money into an account where I have full control over which stocks it is invested in by following my chosen TMF portfolio plan.

-HAK-
Truly hoping that there is actually away to get a good chunk of his 401k into an IRA (either Roth or Traditional) for following a TMF portfolio.
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But, is there ANY options available to someone like me to be able to do this?

Assuming that you want to keep your current job, it depends on whether your plan allows 'in-service rollovers'. Very few plans do, unless you are over 59 1/2.

Your other option is to quit your job, making your current 401(k) a 'former employer 401(k)'.

AJ
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I guess I should have just called them first. I'm just an internet boards freak, and like posting. LOL
I was told that Wells Fargo doesn't do in-service rollovers unless you have qualified distributions (which obviously someone of my age doesn't have). :(
Oh well. Back to the drawing board.
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Does your 401K plan have a brokerage window? Some plans have the option of transferring a percentage of the 401K balance into a brokerage "area" that allows trading of stocks.
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Nope, no brokerage window thing available with our plan. Guess the company didn't choose to have that option available to us when they set up the 401k plan. :(
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But, is there ANY options available to someone like me to be able to do this?

An option is taking a loan. You'd be repaying yourself, with interest, and have access to the funds to invest in a taxable account.

Since there are few options, you might at least want to run a model. There's lots of downsides, not least of which is needing access to the liquidity to repay the loan within 60-90 days of termination.

ETR
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I'm only 36, and I currently have a sizable amount in my company's 401k. I've been with the same company for 13 years now, so I don't have a "former employer 401k".
Now that I've gotten myself started in stocks with joining MDP, and contemplating the new SN, I need funds to truly make decent portfolios in them.


Are you contributing more to your 401(k) that required to maximize employer matching? If so, consider redirecting that excess to either an IRA (Roth if you qualify) or a regular taxable investment account. That would give you cash to invest as you see fit.

Phil
Rule Your Retirement Home Fool
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An option is taking a loan. You'd be repaying yourself, with interest, and have access to the funds to invest in a taxable account.

It's theoretically and option, but not for me. That's simply because I don't need to do a full investment of an amount right now. Any investing, even with the TMF portfolios would be little bits each month. So if I'm planning on setting aside say $500/mo to contribute to my investments, taking out a loan for a lump sump into an IRA and then having to repay that that amount (plus) interest each month....and probably at the same amount I would be setting aside anyway....well....seems kinda silly. :)


Are you contributing more to your 401(k) that required to maximize employer matching? If so, consider redirecting that excess to either an IRA (Roth if you qualify) or a regular taxable investment account. That would give you cash to invest as you see fit.

Nope, I had already dropped my 401k contribution a few years ago (when I bought my condo) to the 6% necessary to get the 3% match. Though I'm wondering if not doing the full 6% might be an idea. If I can get greater gains in my IRA than the "free" match money would be....then that might make sense. But I'm not sure. I have my 401k at a pretty sizable amount for someone my age (at least I think I do), so shifting contributing some of that to my stock IRA to get greater potential gains could be an option.
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Nope, I had already dropped my 401k contribution a few years ago (when I bought my condo) to the 6% necessary to get the 3% match. Though I'm wondering if not doing the full 6% might be an idea. If I can get greater gains in my IRA than the "free" match money would be....then that might make sense.

A 3% match on a 6% contribution is a 50% gain, right off the bat. That's a pretty high hurdle to overcome.

AJ
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A 3% match on a 6% contribution is a 50% gain, right off the bat. That's a pretty high hurdle to overcome.

Duh! Yeah, what was I thinking? Obviously I wasn't. LOL
I just wish I had more available funds for putting into my MDP (and if I choose to try out SN) portfolio.
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Guess the company didn't choose to have that option available to us when they set up the 401k plan.
Doesn't matter if the 401k didn't have brokerage window when it was created - your employer can still add it now if they want to.

Now would be a good time to start talking to your HR department about increasing options in the 401k. Let them know that you aren't satisfied with the few options available. Even better is if you get a few people that agree with you to provide the same feedback.
If you have a company that is somewhat similar and they have a better 401k plan, use that information as well to encourage them to adjust their plan to be competitive.

Start now because Oct/Nov when open-enrollment usually is for most employers is too late. By that point the contracts are in place for the next year. If you provide feedback now, possibly HR can do something for next year.

If you don't provide feedback it may be that HR leadership says to themselves "I wouldn't use this feature, and I haven't heard anything from employees wanting it, so if it saves us $500 over the next year on our bill from Fidelity/WellsFargo/whoever we might as well drop it. Not like anyone will miss it"
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