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| Date | 2025-10-16 01:05 -0400 |
|---|---|
| From | Rich Carreiro <rlc-news@rlcarr.com> |
| Newsgroups | misc.taxes.moderated |
| Organization | A noiseless patient Spider |
| Message-ID | <87zf9rbfnp.fsf@carreiro.org> (permalink) |
| Subject | Tax treatment of 401k in-service withdrawals |
I've been looking at my employer's 401k plan Summary Plan Description and it says that when an employee turns 59.5 in-service withdrawals are allowed and up to all of the vested balance can be withdrawn. I have just under 2 years to go to then and as I'm not happy with the investment choices I'm given (overpriced funds) I'd like to use this to be able to invest the money as I see fit. Question then: can 401k in-service withdrawals be rolled into an IRA (and a Roth IRA for the Roth 401k piece)? Or do in-service withdrawals have to be essentially be taxable withdrawals and can't be rolled over? If they can be rolled over does the law allow for direct rollovers (if the custodian supports that) or do you have to take a "taxable" withdrawal (and suffer the 20% withholding) and roll that into an IRA within 60 days, making up the withheld amount out-of-pocket (and then essentially recovering it when you file your return for that year)? -- Rich Carreiro rlc-news@rlcarr.com -- << ------------------------------------------------------- >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2011) - All rights reserved. >> << ------------------------------------------------------- >>
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Tax treatment of 401k in-service withdrawals Rich Carreiro <rlc-news@rlcarr.com> - 2025-10-16 01:05 -0400
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