Rolling $$$ back out of a 401K
Hi all,
Would love any feedback on this situation….
– I currently have $200K+ in my company 401K plan.
– Of that amount, I rolled about $140K in to the plan from 401K plans at 2 previous employers.
– My company is switching 401K providers – and my fees are going to go from about 0.2% to 0.7%.
– I’d like to roll all of the money out during the blackout period into my own IRA in order to save on fees (I’d just invest in low fee Vanguard funds).
– My understanding is that I can roll out the previous amounts that I rolled in from other retirement accounts, with no tax penalty, but the rest (i.e., the contributions that my employer and I have made to current plan) will need to stay with employer plan.
– Is that the right understanding? If so, does anyone have the tax document or code so I can note it? And can I roll out the appreciation from what I rolled in? If so, how is that calculated?
Any other advice (on how to minimize fees) would be appreciated.
Thanks!
Permalink Submitted by Alan - IRA critic on Mon, 2017-07-03 20:06
You cannot make any changes during a blackout period because the plan is frozen for the duration of that period except for routine elective deferrals from your paycheck. Before or after the blackout, your plan provisions determine if an when prior rollovers into the plan can be distributed. Your plan will also have a method of determining the investment gain or loss on this rollover money which can accompany the roll out when you can proceed with it. Since this information is plan specific there is no IRS guidance on it. The IRS basically only restricts in service rollovers before 59.5 of your elective deferrals. As for the new higher fees, hasn’t your company been taking note of all the class action suits employers have been losing because of high fees? They seem headed in the wrong direction.