Learn about rollovers and penalties related to IRAs.
Q: I have a 401(k) plan through my practice. I am interested in rolling over part or all of the money from my 401(k) plan into an IRA while still working for my practice. Is this permissible and does it carry any penalties?
A: You must be at least 59 ½ to transfer 401(k) salary reduction payments out of your practice's qualified plan and into an IRA. You can do so as long as you continue to work for the same employer. The age requirement does not apply on profit sharing (that is, an employer's contribution) money, but the plan must permit such distributions, and you must have been in the plan for at least 2 years to be eligible for a distribution. Because you are rolling the monies over into an IRA, you are not subject to tax or penalty.