Transfer money back into 401k?

[armor99]

So I had this thought this morning. Went looking on the internet and did not see what I was looking for. Maybe someone here in the forum knows.

So… my goal is to retire at 55. And to avoid penalties where I can for early withdrawals. I should have enough personal contributions in my Roth 401k at my current employer, that when I retire, I can move that money over to my Roth IRA, and combine that with my personal contributions there, to easily have enough to make it to 59.5 when all the penalty “chains” come off.

But then I got to thinking, I actually have a large amount of money in my Traditional IRA. Could I not transfer this money back into a traditional 401k at my current employer and then apply the rule of 55 to get to it without penalty when I retire?

Just a thought I was having. Always nice to have more options when the time comes. Not sure if you are allowed to do this?

 

[Dash man]

You need to check with your plan administrator. Legally it can be done, but your plan may or may not permit it.

 

[SevenUp]

You need to check with your plan administrator. Legally it can be done, but your plan may or may not permit it.

+1

armor99, there are two things the IRS allows but your plan may not:
1) accepting an incoming rollover from your IRA
2) allowing partial withdrawals from the 401k after you retire

 

[armor99]

+1

armor99, there are two things the IRS allows but your plan may not:
1) accepting an incoming rollover from your IRA
2) allowing partial withdrawals from the 401k after you retire

I got on their website… seems like they do. It is listed as a “conduit IRA” thst they will accept? I am assuming that means I can do this. Will find out more next week…

 

[Dash man]

I got on their website… seems like they do. It is listed as a “conduit IRA” thst they will accept? I am assuming that means I can do this. Will find out more next week…

A “Conduit IRA” means the funds in the tIRA originated from an employer sponsored retirement account. Did the funds in your tIRA come from a 401k?

 

[armor99]

A “Conduit IRA” means the funds in the tIRA originated from an employer sponsored retirement account. Did the funds in your tIRA come from a 401k?

A lot of it did, plus contributions of mine for years…

 

[Dash man]

A lot of it did, plus contributions of mine for years…

Since you’ve mixed funds, check with the plan administrator. Hopefully they’ll accept the funds you transferred out at a minimum.

 

[ut2sua]

OP, I transferred my tIRA back into my Fido work 401K. My work plan allowed it. I did a direct transfer of the fund where the check got sent directly to my 401K plan. I recalled having to answer some question in some online form and stating that my ira was a conduit ira. That was good enough for my 401k plan to take in the $. Pretty painless. Good luck

 

[armor99]

OP, I transferred my tIRA back into my Fido work 401K. My work plan allowed it. I did a direct transfer of the fund where the check got sent directly to my 401K plan. I recalled having to answer some question in some online form and stating that my ira was a conduit ira. That was good enough for my 401k plan to take in the $. Pretty painless. Good luck

Well thanks much for the info. Not something I will do now, but probably down the road maybe 6 months before retirement.. For someone that reasearches this stuff as much as I do, I cannot believe this maneuver did not occur to me sooner… [emoji3]

 

[armor99]

Well thanks much for the info. Not something I will do now, but probably down the road maybe 6 months before retirement.. For someone that reasearches this stuff as much as I do, I cannot believe this maneuver did not occur to me sooner… [emoji3]

For whomever might find the info useful. So you can in fact do this. And my 401k plan allows this. They did mention there is some complication of some of the IRA is made up of personal contributions. In my case it is 100% rollover from former companies 401k plans.
So basically what this means for anyone out there that has money in their IRA. You can move all of that money back to your company 401k, (provided your companies allows this), and have access to all of it at 55, no early withdrawal fees at all! Nice…