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In-Service 401k Rollover

How in-service rollovers work and who qualifies, with a real person to call.

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Quick answer

An in-service 401k rollover lets you move funds from your current employer's 401k into an IRA while you are still working, if the plan allows it. Most plans require you to be age 59 1/2 or older. It keeps the transfer tax-free through a direct rollover.

Some workers can roll over part of their 401k before leaving a job. Here is when that is possible.

What is an in-service 401k rollover?

An in-service rollover moves money from your current employer's 401k into an IRA while you are still employed there. Not every plan permits it, and those that do usually require you to be at least age 59 1/2. The appeal is access to a wider menu of investments and potentially lower fees without waiting until you retire. A direct rollover keeps the transfer tax-free and tax-deferred. Because plan rules vary widely, check your summary plan description first. For help understanding your options, call 1-800-MEDIGAP at 1-800-633-4427.

Who qualifies and what to watch for?

Eligibility depends entirely on your plan. Many allow in-service rollovers only for participants 59 1/2 or older, and some restrict which money sources (employer match, profit sharing, or after-tax contributions) can be moved. Rolling out funds may mean losing access to certain plan features, institutional pricing, or a stable-value fund. You also may lose the ability to take a 401k loan against rolled-out money. Weigh these trade-offs, and confirm the tax treatment of any after-tax or company-stock balances with a professional before initiating the rollover.

More on 401k & IRA Rollovers

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Frequently asked questions

Can I roll over my 401k while still employed?+

Sometimes. An in-service rollover allows it if your plan permits, and most plans require you to be age 59 1/2 or older. Check your summary plan description, because many employers restrict in-service distributions until you separate from the company.

Is an in-service rollover taxable?+

A direct in-service rollover from a traditional 401k to a traditional IRA is not taxable; the money stays tax-deferred. Rolling pre-tax funds into a Roth IRA would be a taxable conversion. Confirm the treatment of any after-tax balances with a professional.

Why would I do an in-service rollover?+

Common reasons include access to more investment choices, potentially lower fees, and consolidating retirement assets before you retire. Some savers also use it for estate-planning flexibility. Weigh the loss of any plan-specific features before moving the money.

Do all 401k plans allow in-service rollovers?+

No. In-service rollovers are optional plan features, and many plans do not offer them or limit them to participants over 59 1/2. Your summary plan description or plan administrator will confirm whether your specific 401k allows it.

Who can help me check my eligibility?+

Call 1-800-MEDIGAP at 1-800-633-4427, the trusted toll-free line for all things senior in America. We can help you understand in-service rollovers and how they fit your retirement plan. Confirm plan rules and taxes with a professional.

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