In-Service Rollover at Age 55: How to Access Your 401(k) While Still Working

What Is an In-Service Rollover?

An in-service rollover (also called an in-service distribution) allows active employees to move a portion of their employer plan balance to an IRA while still working. Unlike a regular rollover — which is triggered by leaving an employer — an in-service rollover occurs while you are still employed.

Most plans that permit in-service rollovers require participants to be age 55 or older, though some plans allow distributions at age 59½ or after a certain number of years of participation.

Why Would I Want to Roll Over My 401(k) While Still Working?

The primary reasons are investment flexibility and fee reduction. Most employer plans offer a limited menu of mutual funds with limited transparency on fees. An IRA gives you access to thousands of investment options and allows you to work with a fiduciary advisor who is legally obligated to act in your best interest.

In-service rollovers also allow you to begin ROTH conversion planning before retirement — a strategy that is generally not available inside employer plans. By moving funds to an IRA, you can start converting pre-tax dollars to tax-free ROTH dollars during years when your income may still be relatively high, but before RMDs begin.

How Do I Know If My Plan Allows In-Service Rollovers?

Check your plan's Summary Plan Description (SPD) — a document your employer is required to provide. Look for language about "in-service distributions" or "in-service withdrawals." You can also contact your plan administrator or HR department directly.

If your plan does not permit in-service rollovers, you may still be able to roll over after-tax contributions (if your plan includes them) or take a distribution from a prior employer's plan that you have not yet rolled over.

Advisory services are offered through ABC Wealth PR, LLC, a SEC Investment Advisor. This article is for informational purposes only.