After ceasing employment how quickly can you access into your 401k?
I have a client who is planning on parting ties with employer and wants to know how quickly she should be able to access funds out of her 401k? We are planning on rolling it over to an IRA and then starting 72t distributions. Your help is always appreciated!
Thanks,
Zach
Permalink Submitted by Alan - IRA critic on Mon, 2014-10-13 20:45
The 401k should be available for rollover right away. Processing time is usually 2-3 weeks after submission of instructions, longer if there is an outstanding loan. For smaller firms not using major firms for plan administration, it may take considerably longer. If the direct rollover is initiated by the IRA custodian, it may be faster. If there are any after tax contributions in the plan, remember that the IRS has now authorized the employee to direct the destination IRA, meaning that the after tax amount could be rolled to a Roth IRA.
Permalink Submitted by Charles Csakai on Thu, 2014-10-16 15:08
Does she have to roll the funds into an IRA or does she have the option of leaving the 401k with her employer? If the latter, you might check into the plan’s provisions for distributions, especially if she’s 55 or over. It may be preferable to rolling into an IRA, then setting up 72t distributions.