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If a person want's to transfer his/her 401K money to an external traditional IRA account (say Chase) while he is still employed at the company, will his company permit that? The employee might wanna continue to contribute to his 401K to get the company's matching amount and roll over some amount every year to the external traditional IRA account. Is this something allowed?

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    Obviously, the answer to this question is, "Ask Employer’s HR Department." – RonJohn Jun 7 at 2:40
  • Call the 401(k) provider. You should be able to see the phone number once you log into the account. I asked before, and the answer was no for me. – xuhdev Jun 7 at 3:50
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    To the close voters: This question is not seeking product or service recommendations. Please do not select that as the close reason for this question. – Ben Miller - Remember Monica Jun 7 at 6:01
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    I don't know what a valid close reason would be, but it certainly seems like this is more a question about IBM corporate policy that it is about personal finance. – chepner Jun 7 at 13:20
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    @DilipSarwate I’m not questioning your downvote. However, if your objection was the naming of the employer, that has been removed by the OP. And you don’t really know whether or not the OP has called HR yet. – Ben Miller - Remember Monica Jun 7 at 16:30
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There are many things that an employer can customize about its 401(k) plan, and the feature to allow participants to rollover funds out of the plan while still employed is one of those things. You’ll need to ask your company’s HR department to find out if this is allowed under your 401(k) plan’s rules.

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  • I think you mean "to allow participants over the age of 55 to roll funds out of the plan while still employed"? – Ben Voigt Jun 7 at 14:53
  • @BenVoigt According to this article from Ameriprise: “the majority of 401(k) plans allow employees to roll over funds while they are still working.” – Ben Miller - Remember Monica Jun 7 at 15:21
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    Well that page is very general and doesn't get into the restrictions at all. Here is a better source: "For example, rolling over savings from a 401k plan to a traditional IRA is allowed by law if the money being moved is from employer contributions (either matched money or profit-sharing accumulations). The money being rolled over cannot come from pre-tax contributions unless the employee is 59½ years old or older. " investopedia.com/terms/i/inservicewithdrawal.asp – Ben Voigt Jun 7 at 15:31
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    @BenVoigt Good article. Bottom line, there are lots of details, and even when you find out what is allowed by law, you still need to find out what is allowed by your employer’s plan. – Ben Miller - Remember Monica Jun 7 at 15:47

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