Multiple Rollovers & Education Expenses

L1: Multiple Rollovers & Education ExpensesI am the guy that put as much as possible into 401(k) plan and very little into college fund for three kids. I always took it on “blind faith” that somehow the 401(k) would help finance the kids education expenses. Now I feel like my faith is paying off as I have learned through this website that I can use SEPP or better yet roll funds into IRA and then withdraw w/o penalty.

I have already completed one rollover this year to accesstax-deferred investments not available with employer’s plan. I would like to initiate a 2nd rollover in 2004 for purpose of paying some college expenses.
Question 1: Do you see any problems associated with the 2nd rollover as far as feasibility or timing?
Question 2: Does it matter that the expenses have been paid throughout the year, but the withdrawal is likely to be 4th qtr of 2004?
I understand that Ishould request that the IRA distributionbe coded as “exempt from penalty” if IRA custodian will accommodate.
Thank You!2004-09-07 21:11, By: jazz, IP: [198.208.159.14]

L2: Multiple Rollovers & Education ExpensesGood morning Jazz:
Seems you have both’planning’ and ‘tax’ questions, and I’m not real clear on your situation. Let me ask some questions.
1: What was the source of your rollover this year; K-plan or IRA?
2: Was it really a ‘rollover’ whereby you tookconstructive receipt of the money,or was it a ‘trustee-to-trustee transfer?’ You are allowed to do a true ‘rollover’ with a chunk of money once every 12 months, but you can do as many ‘trustee-to-trustee transfers’ in that same 12 months as you wish or need. (TheBadger can comment on this more.)
3: If it came from your current employer’s K-plan, then we must assume your employer allows withdrawals / transfers – not loans -from the plan while you are employed, and that there are no restrictions on the number you can do within a certain period of time. Please comment for clarification.
If you will comment on these questions I think we can better answer your question.
Jim2004-09-08 09:00, By: Jim, IP: [68.1.157.228]

L2: Multiple Rollovers & Education ExpensesHmm…..I had a feeling I was not being very clear, so let me try again ( see my responses to your questions next to bullets below:
1: What was the source of your rollover this year; K-plan or IRA?

K-Plan
2: Was it really a ‘rollover’ whereby you took constructive receipt of the money, or was it a ‘trustee-to-trustee transfer?’ You are allowed to do a true ‘rollover’ with a chunk of money once every 12 months, but you can do as many ‘trustee-to-trustee transfers’ in that same 12 months as you wish or need. (TheBadger can comment on this more.)

It was a trustee-to-trustee transfer
3: If it came from your current employer’s K-plan, then we must assume your employer allows withdrawals / transfers – not loans – from the plan while you are employed, and that there are no restrictions on the number you can do within a certain period of time. Please comment for clarification.

Employer plan does allow multiple withdrawals / transfers within calendar year, but does IRS permit multiple transfers / withdrawals?
It is my understanding that education expenses withdrawn from an IRA are not subject to early withdrawal penalty….so I must transfer funds from the 401k to an IRA and then withdraw them from the IRA to use this exception?
Does IRS carethat some expenses will have been paid prior to date of the transfer / withdrawal?2004-09-10 11:28, By: Jazz, IP: [198.208.223.35]