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pauleckler already responded, and from the tone of it, it sounds like he knows what he's talking about. But don't give up...... as he said, not all plans prevent this. I speak from experience. My employer's plan doesn't advertise the ability, but in fact it does allow withdrawal, without penalty, even for people far short of retiring or terminating.

I did it a few years ago, initially for the purpose of diversification, putting it into the control of a money manager in some mutual funds. It had all been in company stock prior to that; of course, as soon as I rolled it out into this external IRA, the company stock took off, tripled in under a year! But that's another story. I was able to benefit from that through stock options...... all of which was the point of diversification: it could have gone the other way.

Now, a year ago, I "fired" the money manager and rolled it yet again into an IRA that I control directly, at an on-line broker where I do all my trading, bought a few carefully selected stocks, and watched the money more than double in the last year.

If you think you can do better than the 401(k), ask your fund's administrators what the rules are. "How much would I be allowed to withdraw and rollover into an external IRA?" It may not be the whole amount (I think I was able to take out only the current value of the Company's matching contributions, for example), but you may well be pleasantly surprised. Just be aware that this is your retirement money. Handle with care.

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