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I am 55 and would like to roll my pension into my 401k. Can I take money out the 401 k later without penalty?

Sep 26, 2014 by ernest from Grayslake, IL in  |  Flag
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Peter C. Karp Level 20


The first thing you will need to do is check with your current employer to make sure your plan allows for rollovers into the plan. If they do, they will also be able to provide you with the necessary forms and process to rollover your pension to your 401(k). You may also want to ask them if your plan allows for any distributions at age 55 while employed with them without penalty. Otherwise, normal distributions can begin at age 59 1/2 without the 10% early withdrawal penalty but will be taxable as ordinary income. If you would like to discuss other options you can contact me directly.

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Comment   |  Flag   |  Sep 26, 2014 from San Francisco, CA

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Assuming your 401k accepts rollovers, you can do this. The pension assets will not be treated any differently than other 401k assets when disbursed. As long as you are over 59.5 years of age, there will be no penalty on distribution, but distributions will be taxable income.

Comment   |  Flag   |  Sep 26, 2014 from Bridgewater, NJ

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Yes you can. 401(k)'s also have the provision that you may take non-penalized distributions beginning at age 55, so long as you did not separate from the employer plan prior to age 55.

Comment   |  Flag   |  Sep 26, 2014 from Canton, GA

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I agree with James and William but would add that you need to be sure your Plan allows you to take an "in-service" distribution of the money you roll into your current employer's plan. It could be that the plan has language that does not allow you to take any distribution from the plan (regardless of where the money came from) while you are still employed by this employer. If so you may be better off leaving the money where it is if you feel you will need access to it prior to leaving your current employer. Refer to the Plan's Summary Plan Description document or speak with your Human Resource department.

Hope this helps.

Comment   |  Flag   |  Sep 26, 2014 from Woodbridge, VA

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