Guest Carl C Posted May 23, 2001 Posted May 23, 2001 Is it true that participants in a 401K cannot withdraw their money as long as they are still employed by the company, irrespective of any IRS penalty? I'm not talking hardship. I am VERY dissatisfied with our plan, not because of fund performance, but because of fees, time it takes for our contributions to be posted, and other factors. I would rather take my money out and invest it through a traditional account, but if this is not possible, can I roll the balance into my Roth or Traditional IRA, while still in employ at the company? What other options do I have? Can I demand the money, and if so, what are the retributions, if any? Carl C
Guest Posted May 23, 2001 Posted May 23, 2001 The purpose of a retirement plan is just that - for retirement. Therefore, unless you are 59 1/2 you can not touch the money without hardship [if the documents permits it] (or taking a loan) You can always stop deferring and start putting your new money elsewhere. You can die, but I personally don't like that option. Disability...but basically no, without quitting, you can't do much about the money once it is in the plan.
actuarysmith Posted May 23, 2001 Posted May 23, 2001 I concur with the previous response - in order to take a distribution from a qualified plan, you have to have a "distributable event". Normally this means termination of employment, retirement, death, or disability. It can also include hardship withdrawal or an in-service withdrawal after the attainement of age 59-1/2 (if the document allows). Unfortunately, being dissatisfied with the plan (for whatever reason) is not an allowable reason to take a distribution from the plan. Please be advised that if the fees are too high on the plan (I must ask what you are comparing it to?), or if the employer is taking too long to deposit funds, you may have a reason to contact the Department of Labor and complain. They take complaints such as these seriously, and would likely follow up pretty fast. Good Luck !!
david rigby Posted May 23, 2001 Posted May 23, 2001 This might be a start to getting some more information from the DOL. http://www.dol.gov/dol/pwba/public/pension.htm I'm a retirement actuary. Nothing about my comments is intended or should be construed as investment, tax, legal or accounting advice. Occasionally, but not all the time, it might be reasonable to interpret my comments as actuarial or consulting advice.
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