Page 16 - Means Wealth 2020/2021 Perspectives

IN-SERVICE ROLLOVERS

ost Americans are familiar with the idea of rolling over investments from
M an employer plan (i.e., 401(k) or a 403(b)) to an IRA. The most common
rollovers occur when an employee leaves their employer, reaches retirement,
suffers a disability or their plan terminates. However, these are not the only
occasions that rollovers are allowed. There is actually an option known as
an in-service 401(k) rollover that allows you to continue to work for your
employer and move your existing plan assets to an IRA (or Roth IRA) in your
name. Though it might be a concern,
moving your 401(k) or 403(b) into
an IRA does not mean you lose the “
The difference between
benefit of employer matching in stupidity and genius is that
the future. You will still be allowed
to keep your employer plan active, genius has its limits. “
contributing to it and continuing to - Albert Einstein
benefit from tax-deferred investing.

A vast majority of 401(k) and 403(b) plans offer in-service rollovers—about
77% of them. However, it’s important to note there can be certain restrictions
on in-service rollovers such as an age requirement (typically 59 ½ years old),
a time restriction of holding the assets in your retirement account, or how
long the plan has to be in effect before such an action can take place.
The flexibility of an in-service rollover can be significant. Many employer
plans restrict investments to a small list of funds that may be expensive,

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