Published: Feb. 22, 2008By Jim Lentini, CLU, ChFC, IAR
If you are a participant in a company sponsored 401(k) plan, there may be some benefit for you to consider an in-service distribution to an IRA. While it is important to save as much as possible for your retirement, it is also important to make your retirement dollars work as hard as possible; so an in-service withdrawal might make sense for you.
Employees may roll over their retirement plan accounts to an IRA when they retire or quit. However, many people do not realize that certain retirement plans assets can be rolled over to an IRA even while they are still “in-service.” Many retirement plans offer the opportunity for in-service withdrawals.
Why consider an in-service withdrawal?
While all qualified retirement plans offer tax-deferral, IRAs offer compelling tax advantages over 401(k)s and other retirement plans. You may want to consider an in-service withdrawal to an IRA if:
