72T distributions changing from IRA to active 401k?
Is it somehow possible to move the balance from an IRA where i’ve been taking 72T distributions for 2 yrs (currently age 54) to an active 401k I have? If I continued to take the same dollar amount out from the 401k until age 59.5? My 401k allows rollovers and allows early withdrawals while still active.
Reason:
I have a specific investment offered within my 401k that is not available anywhere else and would want my IRA dollars invested in that specific account once I retire in 3 yrs., if that’s possible. ❓
Permalink Submitted by Alan Spross on Tue, 2007-09-25 00:22
No, the transfer of a 72t IRA into a 401k account would bust the SEPP and expose you to retroactive penalties and interest. The most obvious reasons would be that new contributions would be made to the 401k and that the 401k would not have a -0- balance at the time it received the transfer. A third less obvious reason is because the 401k is a totally different type of retirement plan from an IRA.
While you cannot do this transfer without busting the SEPP, it is also very hard to imagine a situation where a 401k offers an investment that cannot be duplicated in an IRA, or at least with a surrogate investment that is 99% identical. Of course, the IRA would have to be on a brokerage platform where almost unlimited investment options are available.