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I have been employed at wal-mart for 30 years and have around 500k in retirement and wish to retire at 62. Can I pull out my retirement and reinvest at 59 1/2 to to bring in additional income before age 62 without leaving the company.?

Aug 23, 2012 by gary from McMinnville, TN in  |  Flag
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Hi Gary, Check with your administrator for the plan. There might be a clause that allows for in service withdrawals. you have to examine the guidelines for that to see if it accomodates what you want to do. I agree with Helen, you should work with a fee based advisor to get an overview of your particular situation to decide if what you want to do is in your best interest. Best of luck, Dan

Comment   |  Flag   |  Aug 23, 2012 from Asbury Park, NJ

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If your plan allows for an "in-service" distribution, you may be able to roll all or some of your existing 401(k) balance to an Individual Retirement Account (IRA) that you may direct or have the help of an investment advisory firm manage. When you say "additional income" I can only imagine that you're referring to an investment mix that produces more income when you reach retirement since you will not be tapping the 401(k) proceeds before retirement.

But maybe you want to start taking distributions to supplement your current income. What you would then need to look into is what is called a 72(t) distribution. In this case you would move the funds (some or all) into a rollover IRA (assuming that you have an "in-service" option noted above) and then you must take out substantially equal amounts until age 59 1/2 or FIVE years (whichever comes later - 5 years in your case it sounds like).

Comment   |  Flag   |  Aug 23, 2012 from Amesbury, MA

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Most employer plans prohibit participants from withdrawing funds prior to separation from service. Your term "reinvest" is puzzling, as I'm certain your retirement plan has investment options, so theoretically, your funds are being reinvested while in the plan. I would suggest finding a CFP(R) professional in your area who can guide you and your investments as you near retirement. Good luck! It sounds as if you have done a great job saving for your retirement.

Comment   |  Flag   |  Aug 23, 2012 from Fort Worth, TX

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Gary, one other thing to add, to already great answers that you have received, is: some times in 401k plans you or your employer made after tax contributions, therefore if your plan rules allow you to do an in-service rollover, once you are 59 1/2 years old, you might, potentially, have access to after tax contributions, that would not be taxable to you when you withdraw them. Not sure if you have any,but certainly worth looking in to it. If you do have it and your plan allows for in service rollover, separate them at the time of a rollover and you will receive a check just for the after tax portion. Best of Luck Sincerely Michael

Comment   |  Flag   |  Sep 24, 2013 from Farmington, CT

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