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My wife has a 401k with her employer that she has been contributing to for years. They recently switched administrators for the 401k, and the new outfit is simply terrible - bad fund choices and outrageous fees.

I would like to roll over her 401k into an IRA where I can manage the investment choices myself. I know we can do that if she were to quit her job, but can we do it while she is still employed there?

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3 Answers 3

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Unfortunately, It would be very unusual if you were able to roll a 401k out of your current employer.

Details are plan specific, so you should check with your plan administrator.

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If you meet the criteria, an In-Service Distribution would allow this. Take a look at this write up about the details:

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Re: criteria. This is probably the deal-breaker for most people: " First things first, you HAVE to be 59 1/2. " ... – Chris W. Rea Aug 11 '10 at 21:59
@Chris - yup, that would be a deal-breaker for us. – Eric Petroelje Aug 11 '10 at 22:21
I'm not sure that's true, see here: "Of course, if you're under 59 1/2 you'll get hit with taxes and penalties, unless you roll your 401k account into an IRA." – mehaase Jun 8 '11 at 0:16

The answer to your question in almost all cases is, "No.". You can only roll over a 401k to an IRA at the time you leave a company. There are some exceptions as noted by Dougman, but generally, there isn't a way to do this.

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