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Old 01-10-2015, 09:55 AM   #21
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I have never heard of this at all! How can 401K dividends "pass through" for income with no penalty unless you are doing a 72T?
I don't know how it was done but when my ESOP(I never put a dime in) held shares of Megacorp started paying a dividend it was passed through without penelty. I was only getting $6,000 a year, but the C levels received 10-50 times that amount.

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Old 01-10-2015, 10:00 AM   #22
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Stable value fund is what is keeping me from rolling over my 401k.
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Old 01-10-2015, 10:16 AM   #23
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There are two reasons I keep my 401k with my previous employer. First is the stable value fund, even though it is only paying 2% right now. Second is the ability to draw on it between now and the time I turn 59 1/2 without penalty.
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Old 01-10-2015, 12:50 PM   #24
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I have always moved my 401(k) $ to Vanguard rollover IRA ASAP upon leaving an employer because I do not wish to be constrained to the funds that the investment committee of the company has ordained appropriate for the other employees. More flexibility is good for me.
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Old 01-10-2015, 01:15 PM   #25
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I have always moved my 401(k) $ to Vanguard rollover IRA ASAP upon leaving an employer because I do not wish to be constrained to the funds that the investment committee of the company has ordained appropriate for the other employees. More flexibility is good for me.
I agree that if you have crappy funds - roll it immediately. That's the case for my husband's former employer... 100% of the funds have loads - including the money market!!!! Most are in the order of 5%. And there are high fees on these front and back loaded funds. I'd never seen such a craptastic plan. I even told his boss that. Looks like he'll be formally separated from them in late January (after his failed retirement last year) and we'll roll it out.
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Old 01-11-2015, 01:16 PM   #26
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I have never heard of this at all! How can 401K dividends "pass through" for income with no penalty unless you are doing a 72T?
It's an investment option of your 401k. I think came about as a result of the Enron fiasco to allow you to diversify your company stock holdings. Note this is just for your company stock. There is no 10% penalty but no special treatment like qualified dividends. It's a nice option have.

How 401(k) Dividends Are Paid | Finance - Zacks

Company Stock Dividends
The option to purchase company stock in your 401(k) plan can also classified as a qualified employee stock ownership plan, or ESOP. Under the ESOP rules you must be given the option to either reinvest the dividends paid on company stock into more shares of the stock or have dividends paid out directly to you. The choice of where the 401(k) company stock dividends go is an election on your 401(k) investment choices form.
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Old 01-11-2015, 01:44 PM   #27
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Since OP 401k has stable value and a reasonable choice of funds with low fees, I woudl stand pat. No compelling reason to rollover and some good reasons to stay.
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Old 01-11-2015, 01:54 PM   #28
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There are two reasons I keep my 401k with my previous employer. First is the stable value fund, even though it is only paying 2% right now. Second is the ability to draw on it between now and the time I turn 59 1/2 without penalty.
Those two seem like the main reason you'd want to keep it with employer.

If the OP's expenses are really .07% then that is pretty good reason to keep it there, but as general rule "Roll them 401K into an IRA."
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Old 01-15-2015, 10:57 PM   #29
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I rolled over a 401-k from a previous employer to an IRA and then regretted it. After learning about the ability to take a penality free withdrawl from my new employers 401-k at 55 years of age (actually Jan.1 of the year I turn 55) I thought I would just have to live with my mistake. I learned on this forum that some 401-k plans allow transfer from an IRA to a 401K, (not all will) mine did allow it and thats just what I did.

I believe it is more common for 401-k plans to allow a rollover from a former employers plan than from an IRA.

I did leave a healthy balance in the IRA to make IRA to Roth IRA roll over contributions.
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Old 01-19-2015, 12:39 PM   #30
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Reason(for me) is I retired at 56 and could use the 55 and terminated from service rule to allow penenlty free withdrawals. Yes, I checked up front and knew I could actually receive distributions on a monthly basis.

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