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Asked 8/28/2009
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Non-hardship, in-service withdrawal from a 401k. I wish to roll over my entire 401k account to a self-directed IRA so that investment can be made in real estate (which the 401k plan does not allow). As long as the plan allows this type of withdrawal (a non-hardship, in-service withdrawal), can this withdrawal include ALL sources, including employee deferrals? Or are employee deferrals off-limits by law? I have asked multiple CPAs and lawyers... get conflicting answers. If this is restricted, can you point me to the appropriate IRS form or document? I haven't been able to find it. |
Answer 1/1 - Submitted 8/29/2009
You must arrange for a "direct" rollover (also known as a "trustee to trustee" rollover). Put simply, this means the distribution check from the retirement plan at your company must be made out in the name of the trustee or custodian of the IRA account that you want to receive the rolled-over funds. Ask the bank or brokerage house that will function as the IRA trustee or custodian for specific written instructions on how the check should be made out. It will be something like: "ABC Securities Corporation, for the benefit of Winter368." If this is done, there is no tax liability.
http://www.smartmoney.com/personal-finance/retirem ent/rolling-over-retirement-accounts-7943/
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