Retirement Information and Tips
I am still working and approaching 59 1/2. My 401K plan allows for in-service rollovers to an IRA. Fidelity manages the 401K plan and I currently have both an IRA and Roth IRA at Fidelity. Can a rollover be performed and still keep me in the market during the process, or will I need to sell everything first? Ultimately, I plan to hold different assets in the IRA from those in the 401K. Also, I have some after-tax money in the 401K which I believe can roll into the Roth IRA?
Asked by a 59 year old man from Marion, IA on 7/13/2017
Good afternoon Sir,
Most retirement plans don't permit "in-kind" transfers to a rollover IRA. However, since your 401k plan is with Fidelity and you have an IRA with Fidelity, this may be possible as Fidelity has allowed this in the past. You should check with Fidelity to confirm before doing anything.
One more thing. Since you don't plan to keep the current holdings anyway, you may want to calculate how much trading costs you will incur when you sell them in the IRA. Perhaps, it will be better to liquidate the holdings inside of the 401k first to avoid transaction costs. However, this all depends on level of assets, number of holdings, as well as what Fidelity would charge you.
I hope this helps.
Best,
Marc
Marc Jimenez, CFA, CFP®
Managing Principal & Founder
CAM Investor Solutions
387 Corona Street, Suite 538
Denver, Colorado 80218
Office: (720) 575-7775
Mobile: (512) 923-2108
marc@caminvestor.com | www.caminvestor.com
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