Remember the good old days of whistling while you work in regards to your 401k? Your company used to have a very nice match to your 401k. Your balance was at at all time high and retirement seemed like just over the horizon. Then 2008 came along and the whistling turned into more of a whimper. Don’t worry, I was whimpering, too. For those that are 59 1/2 and still working, I might have a reason for you to whistle again. The reason behind it is called the 401k in-service distribution.
I took a call from a client recently whose employer was getting ready to switch 401k providers again (3 times in the last 5 years) and was frustrated with the new investment options. He is over 59 1/2 and had heard that he might be able to rollover his 401k to an IRA and also continue to fund his 401k. I was excited to share with him that he in fact could do this and that the procedure was called an in-service distribution.