Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Rolling 401K over to IRA while Still Employed
Old 05-31-2023, 01:44 PM   #1
Confused about dryer sheets
 
Join Date: Jan 2022
Posts: 4
Rolling 401K over to IRA while Still Employed

Hello,
Please tell me what you think about this plan.
DW is still working and has been contributing to Roth 401K for a few years now. Before that, she was contributing to 401K pre-tax.
We are not happy with high fees and limited options.

We would like to roll all pre-tax 401K money into tIRA, and Roth 401K into Roth IRA while she is still employed.

She would still like to keep 401K account active at work and keep contributing to it, she is contributing the maximum allowed amount.

What do you think about this plan? It this combination of employer’s 401K and IRA possible?

Thank you very much for your suggestions and advise.
oceanmd is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 05-31-2023, 01:46 PM   #2
Recycles dryer sheets
 
Join Date: May 2008
Posts: 266
Have to check her plan rules. My 401k does not allow any roll over while employed, except for after tax contributions.
madatrub is offline   Reply With Quote
Old 05-31-2023, 03:45 PM   #3
Thinks s/he gets paid by the post
GalaxyBoy's Avatar
 
Join Date: Jul 2009
Location: The Beautiful Blue Ridge Mountains
Posts: 2,702
Yes, it all depends on the plan’s rules. If allowed, I agree that would be a good approach. When I was w*rking my 401(k) plans all sucked, but none of the plans’ documents allowed for an in-service rollover.
GalaxyBoy is offline   Reply With Quote
Old 05-31-2023, 07:00 PM   #4
Thinks s/he gets paid by the post
Out-to-Lunch's Avatar
 
Join Date: Jan 2020
Location: Milwaukee
Posts: 3,514
How old are you each and when do you plan to retire?

If you plan to retire early, note that you can get money free of penalty from your 401(k) if you retire in the year you turn 55 (or later). This is not true of an IRA.
__________________
The closing years of life are like the end of a masquerade party, when the masks are dropped. -Arthur Schopenhauer, philosopher (1788-1860)
Out-to-Lunch is offline   Reply With Quote
Old 05-31-2023, 07:05 PM   #5
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Aug 2016
Location: Northern Virginia
Posts: 7,220
Quote:
Originally Posted by oceanmd View Post
Hello,

Please tell me what you think about this plan.

DW is still working and has been contributing to Roth 401K for a few years now. Before that, she was contributing to 401K pre-tax.

We are not happy with high fees and limited options.



We would like to roll all pre-tax 401K money into tIRA, and Roth 401K into Roth IRA while she is still employed.



She would still like to keep 401K account active at work and keep contributing to it, she is contributing the maximum allowed amount.



What do you think about this plan? It this combination of employer’s 401K and IRA possible?



Thank you very much for your suggestions and advise.
Yes. The tax rules allow for it. Your plan may or may not.

I did an in service withdrawal of my entire balance before I retired because I was the administrator and I did not know the company's succession plan.

I continued to contribute and thus reduced the amount subject to any delays.

This is after 591/2.
Montecfo is offline   Reply With Quote
Old 06-01-2023, 03:24 PM   #6
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Aug 2004
Location: Laurel, MD
Posts: 8,076
Yes, if your plan permits it can be a very good move. I made many rollovers to purchase CD promo deals while activelt employed. Fidelity managed my 401k so I also did rollovers to Fidelity IRAs so when I login both accounts are visible.
__________________
...with no reasonable expectation for ER, I'm just here auditing the AP class.Retired 8/1/15.
jazz4cash is offline   Reply With Quote
Old 06-01-2023, 06:31 PM   #7
Confused about dryer sheets
 
Join Date: Feb 2023
Posts: 1
Given the poor investments options offered by a typical 401(k), it is indeed a good move [once again, if your plan permits]. I started transferring money from my 401(k) recently. Pre-tax goes to "rollover" IRA and post-tax to Roth IRA. I do not leave money sitting in my 401(k) anymore. All accounts managed by Fidelity; makes the transactions a breeze.
t-bone is offline   Reply With Quote
Old 06-01-2023, 06:50 PM   #8
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
MRG's Avatar
 
Join Date: Apr 2013
Posts: 11,055
I was able to do this, as said, it's dependent on the plan.
MRG is offline   Reply With Quote
Old 06-01-2023, 08:40 PM   #9
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Koolau's Avatar
 
Join Date: Jul 2008
Location: Leeward Oahu
Posts: 16,713
Once Megacorp changed their rules on 401(k) and allowed roll-overs to tIRAs, I did so. Eventually, I moved it all back. YMMV
__________________
Ko'olau's Law -

Anything which can be used can be misused. Anything which can be misused will be.
Koolau is offline   Reply With Quote
Old 06-01-2023, 09:58 PM   #10
Confused about dryer sheets
 
Join Date: Jan 2022
Posts: 4
Thank you for all replies, very interesting, different experiences, especially rolling the money back from IRA to 401K.
DW checked on the rules, and it is allowed. So we are going to rolllover both pre-tax and Roth. She is not planning on taking any distributions before 59 and a half.
After the rollover is complete, will she be able to start taking distributions from IRA after 59 1/2 ?
oceanmd is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Pros & Cons: Rolling over 401K/403B to an IRA ? cyber888 FIRE and Money 52 05-16-2016 09:12 AM
Rolling Over 401K Funds While Still Employed younginvestor2013 FIRE and Money 3 06-30-2013 12:25 PM
Transfer 100% of 403b while still employed? mystang52 FIRE and Money 8 11-07-2012 12:46 PM
Can I roll over 401k funds while still employed? livnlow Young Dreamers 45 01-20-2007 11:51 AM
Rolling over 401k/IRA to Fidelity, any ideas? OldAgePensioner FIRE and Money 0 10-22-2005 09:10 AM

» Quick Links

 
All times are GMT -6. The time now is 01:42 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2023, vBulletin Solutions, Inc.