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Merlo
Merlo, Accountant
Category: Tax
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Experience:  25+ years tax consulting. Specializing in returns for US citizens living abroad
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Im over 59 1/2 and would like to close out my company 401k.

Customer Question

I'm over 59 1/2 and would like to close out my company 401k. Can company plans stop you from rolling over your funds to another account even though you are not terminated or reitred?
Submitted: 7 years ago.
Category: Tax
Expert:  Milan Vaishnav replied 7 years ago.

Dear Sir,

 

NO..Your company plans CANNOT normally stop you from rolling over your funds to any other account. AND since you are over 59 1/2, you will also not attract any distribution tax.

 

I hope the above helps..Good Luck..

Regards,

Expert:  Merlo replied 7 years ago.
HelloCustomer

The question you asked has been referred to the Tax Forum to be addressed.

Since you are over the age of 59-1/2, you may be able to take an in-service withdrawal from your 401k plan and roll those funds over to an IRA. However, the answer to that question really lies in the rules of your employer's plan.

If you are 59-1/2 years of age or older, and still working, most qualified plans allow “age 59 1/2 rollovers”. If a particular plan does not, they most likely allow rollovers at age 65.

Each employer sponsored 401k plan has their own rules, so you would really need to check with your plan administrator to see if your plan allows for a withdrawal while you are still employed. It is not automatic that at age 59-1/2 you are able to withdraw these funds. That only applies if you no longer are actively employed.

Thank youCustomer and let me know if you have more questions.

Merlo, Accountant
Category: Tax
Satisfied Customers: 9783
Experience: 25+ years tax consulting. Specializing in returns for US citizens living abroad
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