Rollovers

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L1: RolloversHello. I have been trying to figure out how to take my 401K money for quite a while now, and have a few questions. 1) If I rollover money from a 401K plan to a plan with a new employer, and I separate from that new employer during the year I turn 55, is all of the money available penalty-free, or only the money that was contributed directly into the new employer’s plan? 2) The Principal tells me they can set up a 72t without rolling the money out of the 401K. Could this be true? I think I have gathered that this can be done, if the Plan allows it.
If 1) were true, then one could find an employer before age 55 with a 401K, jump in, rollover all other money to the plan, terminate at 55, and sing all the way to the bank. Possible?2006-02-22 11:41, By: Ray, IP: [206.194.127.112]

L2: RolloversHello Ray:
1. Yes. If you transfer from your old K-plan to your new company’s K-plan, then all monies are assets of and controlled by thenew K-plan. So if you retire from the new company with an attained age of 55, you can make withdrawals free of the 10% penalty.
2. Probably, but it all depends on what is allowed by the plan document.
There are no absolutely perfect methods for taking money out of retirement plans. Each person’s situation is different, and as time goes by what was working earlier can develop drawbacks so that you have to make changes. Between 55 and 60, drawing funds from your K-plan works. However, as you get beyond age 60, other factors come into play that usually dictate doing an IRA Rollover. The biggest factor is how the funds are handled when you die. Generally you are better to be in an IRA and not a K-plan.
Keep doing your researchand check with a qualified wealth advisor for your particular situation.
Jim2006-02-22 12:52, By: Jim, IP: [70.184.1.35]