This week’s theme on the Retirement Quick Tips Podcast is: 401k Strategy in 2023

Today, I’m talking about a question I get a lot from clients – can I rollover my 401k to my IRA while I’m still working? …(read more)

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Many people may wonder if they can rollover their 401k while they are still working. The short answer is yes, it is possible in some circumstances. However, there are certain rules and regulations that must be followed in order to do so.

One option for rolling over your 401k while still employed is through an in-service withdrawal. This allows you to transfer a portion of your 401k funds into an Individual retirement account (IRA) while still working for the same employer. Not all employers offer in-service withdrawals, so it is important to check with your plan administrator to see if this option is available to you.

Another option for rolling over your 401k while still working is through a direct rollover. This involves transferring your 401k funds directly into an IRA or another qualified retirement plan without taking possession of the funds. Again, not all employers allow for direct rollovers while still employed, so it is important to check with your plan administrator to see if this option is available to you.

There are a few benefits to rolling over your 401k while still employed. One benefit is that it allows you to have more control over your retirement savings. By rolling over your 401k into an IRA, you may have more investment options and flexibility compared to your employer-sponsored plan. Additionally, rolling over your 401k may provide more opportunities for growth and potentially lower fees.

However, there are also some drawbacks to rolling over your 401k while still working. One drawback is that you may be subject to early withdrawal penalties if you are under the age of 59 ½. Additionally, rolling over your 401k may impact your employer’s matching contributions or other benefits that are tied to your 401k plan.

Before making a decision to rollover your 401k while still working, it is important to carefully review all of your options and consider the potential consequences. It may be beneficial to speak with a financial advisor or tax professional to ensure that you fully understand the implications of rolling over your 401k while still employed.

In conclusion, it is possible to rollover your 401k while still working in some circumstances. However, it is important to consider all of your options and carefully weigh the benefits and drawbacks before making a decision. Be sure to consult with your plan administrator and seek advice from financial professionals to ensure that you are making the best decision for your retirement savings.