Whether or not you can roll funds from a 401(k) or an 澳洲幸运5官方开奖结果体彩网:individual retirement account (IRA) into a more liquid investment fun🦩d depends on a few factors. You may be able to chang♌e your investments in an IRA, but doing so within a 401(k) is a different matter, as these plans typically have limited options from which to choose.

Speaking in general terms, IRA and 401(k) assets that are 澳洲幸运5官方开奖结果体彩网:distributed and not 澳洲幸运5官方开奖结果体彩网:rolled over to another IRA or eligible retirement plan will be subject to income tax. They may also be subject to an early-withdrawal penalty of 10% if you are under age 59½.

IRA Rollovers

You may be able to change your IRA investments or even transfer your account to another financial institution that offers the types of options you prefer. Check with your financial institution regarding its policies for allowing transfers, as there are some IRAs that require a minimum investment period in order to avoid early termination charges. As long as a 澳洲幸运5官方开奖结果体彩🅺网:qualified rollover is made within 60 days of withdrawing the funds to be rolled over, there is no early withdrawal penalty.

Within your IRA plan, you can invest in any number of assets, including stocks, bonds, mutual funds, and 澳洲幸运5官方开奖结果体彩网:exchange-traded funds (ETFs). Some IRA 澳洲幸运5官方开奖结果体彩网:custodians even allow for commodities or real estate. You may have to pay your custodian a broker fee or commission to trade inside of it, but as long as it stays in your IRA, there are🐷 no tax penalties.

401(k) Withdrawal-Triggering Events

The 401(k) plan is a different matter. You are able to withdraw assets from your 401(k) plan only if you experience a 澳洲幸运5官方开奖结果体彩网:triggering event (see the list below). ✃If you do expe๊rience one, you may roll your 401(k) assets into a traditional IRA or another qualified plan.

Typically, 401(k) plans offer participants a limited number of investment options, such as a handful of mutual funds and 澳洲幸运5官方开ꦺ奖结果体彩网:sometimes annuity contracts and ♑company stock, so rolling over funds to a🉐nother retirement account can result in more choice.

For most 401(k)𝓰 plans, ♕the triggering events are the following:

• Reaching retirement age: This is generally age 59½, but it could be earlier or as late as age 65.
• Termination of employment: You are no longer employed 澳洲幸运5官方开奖结果体彩网:by the comꩲpany that offers the ꦦ401(k) plan in question.
• Death: In this case, your beneficiaries are allowed to distribute your assets.
• Disability: The document that governs the 401(k) plan generally provides a definition of “disability,” which may vary from plan to plan.
• Termination of the plan: Your employer terminates the 401(k) plan and does not replace it with another 澳洲幸运5官方开奖结果体彩网:qualified plan.

In-Service Withdrawals

If none of the above triggering events occurs, then you cannot withdraw assets from your 401(k) account unless the plan allows for an in-service withdrawal (one that can occur in the absence of a triggering event)ಞ.

Some 401(k) plans limit in-service withdrawals to certain circumstances. You may, for example, be allowed a withdrawal if you need the money to pay medical expenses, your mortgage, or rent. Your plan administrator will be able to 澳洲൩幸运5官方开奖结果体彩网:explain whether your plan has these provisions and any applicable limitations.

Impact of the CARES Act

The Coronavirus Aid, Relief, and Economic Security Act (澳洲幸运5官方开奖结果体彩网:CARES Act) of 2020, meant to provide economic relief amid the COVID-19 pandemic, temporarily changed retirement plan withdrawals and tax liability for the tax year. The following information is now no longer current, but it 𝓡highlights a good example of how federal legislation can impact retirement accounts.

An eligible participant was a person who has been diagnosed with COVID-19, had a spouse or dependent diag﷽nosed with COVID-19, or had experienced a layoff, furlough, reduction in hours, or inability to work due to COVID-19 or lack of childcare because of COVID-19.

The law stated that eligible participants could withdraw up to $100,000 early from 401(k)s, 403(b)s, 457s, and traditional IRAs without paying a 10% penalty. The act also put on hold the mandatory 20% tax withholding that normally accompanies early distributions from workplace retirement plans, including 401(k)s. IRAs don't have an early withdrawal mandatory tax withholding requirement.

The Bottom Line

You should 澳洲幸运5官方开奖结果体彩网:consult with a ✤competent financial advisor or investment professional before taking action on any of the above scenarios. There is usually a𒀰 cost associated with any consultation (unless you can get it for free from your employer), but it may be well worth it.