In-Service Withdrawal
A 61 year old client recently requested an “In-Service Withdrawal” for a portion of his 401(k) to be applied to an existing IRA. Can some or all of those assets be transferred back to the 401(k)? He is still employed.
A 61 year old client recently requested an “In-Service Withdrawal” for a portion of his 401(k) to be applied to an existing IRA. Can some or all of those assets be transferred back to the 401(k)? He is still employed.
Permalink Submitted by Alan - IRA critic on Wed, 2018-04-18 18:26
It depends on whether the plan will accept IRA rollovers, and if the IRA is not a rollover IRA whether they will accept IRA rollovers from a contributary IRA. If some of the funds have not been rolled into an IRA yet, the plan may or may not take them back, so the client should first check with the plan to determine if any amount not yet rolled to the IRA should be in order to get these amounts back into the plan. Finally, if the distribution to client was not a direct rollover, then withholding will also become an issue.