Safety for a 401K
April 28, 2008 3:33 PM   Subscribe

Aged 65, still working, have 401K, worried about it, can I move the funds to a self directed IRA money market fund?
posted by Freedomboy to Work & Money (5 answers total) 1 user marked this as a favorite
 
If you're still working for the company (and this isn't a 401k from an old employer), you should look at what your other investment options are. I'm aware of some places where it's "company stock or nothing" but most 401k plans have an investment option that's a money market fund. It might have a title like "Stable Value Fund" or something.

If it's from an old employer, you can roll over the 401k into an IRA (and presumably get the funds into a money market fund).
posted by QuantumMeruit at 4:01 PM on April 28, 2008


Typically you can not withdraw money from a 401-k as long as you are employed at that company.

My employer, Northrop-Grumman offers a PCRA (Personal Choice Retirement Account) through Charles Schwab.

I can deposit and reallocate funds to the Schwab account just like any other option within the plan.

Once the money is in the Schwab account I have nearly unlimited investment choices, mutual funds, stocks, and possibly bonds.

Options are exclude due to their high risk, but writing a covered call might be permitted.
Check with your benefits/retirement department to see if they offer a similar plan.

Happy retirement (when you do)!
Stephen
posted by swarkentien at 4:08 PM on April 28, 2008


Some 401 (k) profit-sharing plans permit in-service distributions although most don't.
Here's what I would suggest:

1) review your 401(k) plan's summary plan description. You can get this from your employer. The summary plan description will tell you if you can take a distribution before you stop working.

2) If the answer to # 1 is no, write a letter to the plan sponsor (usually your employer) and ask that they allow in-service distributions to persons like yourself, who have reached normal retirement age, 65.
posted by bananafish at 4:19 PM on April 28, 2008


Talk to the benefits person at your workplace, they should be able to explain your companies policies and the law as well.
posted by Falconetti at 4:33 PM on April 28, 2008


Check with HR about the rules for your plan. Most plans allow you to roll over a 401(k) to a self-directed IRA if you are older than 59 1/2 and still working.

If you have any after tax contributions, you should first roll those contributions into a Roth IRA and then as a second step roll the pre-tax contributions and earnings into a traditional IRA. The reason for this is that if you roll all of your contributions into a traditional IRA, you have to pay more taxes to convert after-tax contributions to a Roth. If you don't have after-tax contributions, just roll the whole thing into a traditional IRA.
posted by JackFlash at 4:34 PM on April 28, 2008


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