Individual 401k
Are 60 days roll over allowed for indiv 401K? A client of mine would like to take a distribution of 200K from his indiv 401K and then deposit back into his 401k indiv. Charles Schwab will not allow loan features on indiv 401K, so client would like to take the distribution.
Permalink Submitted by Alan - IRA critic on Sat, 2024-06-15 00:20
First. if the 401k is active it needs to be determined how much of the balance is eligible for distribution. Then it must be determined if the plan will accept rollovers from an IRA. If OK so far, the distribution could be rolled into an IRA and then rolled back into the plan. But the mandatory 20% withholding will be a problem as client would have to come up with that amount (40k) from other funds, and roll it into the IRA, which would then have 200k to roll back into the 401k. It’s very likely that one of more of these transactions would eliminate the distribution or the rollovers.