Can I roll over 401k funds while still employed?

[livnlow]

Originally Posted by justin

livnlow,

You're only putting in 3% to get the 3% match, right?

No. I'm currently at 43% for the last few months of this year so I can max out. Next year I plan to back of to 30% which will keep it maxed. Are you thinking I might be better off investing post-tax?

[Mr._johngalt]

Originally Posted by livnlow

Alright, all this talk about plans made me think about "The Plan". Enjoy.

Verily I say unto you, read this and you shall see the truth.
(But never in my company)

JG

[livnlow]

OK, it's been awhile, but I finally got around to pursuing my plan to get my money out of my 401k plan. I called the plan administrator last week and asked her if she had any objection to changing the plan to allow in service withdrawals. She did not. So now I'm going to try to figure out what I need to do to make this transition without any problems. I plan on rolling over the funds that are currently in my plan, and then doing a once a year rollover after that for future contributions. Any traps I should look out for? I don't want to end up paying penalties or having a taxable event.

[jazz4cash]

Livinlow
Since it was so easy to get your admin to modify the plan to permit rollovers, I wonder if you asked if they would consider a better plan to begin with? Those ERs and deferred sales charges are outrageous.

It sounds like your employer is reasonable, but who is the custodian? They will not likely be anxious to roll the funds to another custodian. You should be able to initate a trustee-to-trustee rollover from either the current or prospective custodian. The current custodian may also cut a check payable to " prospective custodian, FBO:Your Name". Either of these methods should avoid mandatory 20% witholding. Stay in telephone contact with the current custodian so things don't stall..........it took me 10 weeks the last time I did a rollover.

[livnlow]

Originally Posted by jazz4cash

Livinlow
Since it was so easy to get your admin to modify the plan to permit rollovers, I wonder if you asked if they would consider a better plan to begin with? Those ERs and deferred sales charges are outrageous.

It sounds like your employer is reasonable, but who is the custodian? They will not likely be anxious to roll the funds to another custodian. You should be able to initate a trustee-to-trustee rollover from either the current or prospective custodian. The current custodian may also cut a check payable to " prospective custodian, FBO:Your Name". Either of these methods should avoid mandatory 20% witholding. Stay in telephone contact with the current custodian so things don't stall..........it took me 10 weeks the last time I did a rollover.

jazz4cash, Sorry for the slow response. I've been away for a few days. I think you're right about talking to my employer about a better plan. It became obvious when I talked with her that she was just sold on our 401k plan by a salesman, without knowing what a good plan is. It is not her area of expertise, and I don't think it ever will be, so I may do some research on my own to present to her about some other plans. Our payroll is bundled in with the 401k so it may make it a little more complicated, but it's still worth looking into.

As far as the custodian, she has been much more helpful to me since I caught her in a blatent lie. I think it is commonplace for some to lie because most of thier clients are ignorant of the law. From now on I plan on knowing the answer to a question before I ask her. The outcome seems to be better that way.

[jazz4cash]

I think your situation is very common, especially for smaller companies, but some large companies as well. Too many people think a 401k is a generic product, but in reality the employer makes many choices that can favor the employee over the custodian. It sounds like your admin contact would be happy to have more feedback from you to improve the plan, so I like your idea give her some "guidance".