Most 401k plans are designed with a companies needs in mind. Frequently they contain inferior and insufficient investment options to truly diversify and protect your investments.
What can you do?
Many plans allow for what’s called an “In Service Withdrawal” which enables you to take control of your investments and get them out of the company plan while still employed and without adverse tax consequences.
How does it work?
First, the employer company must offer an In Service Withdraw and you (the participant) must meet their qualifying criteria. Next, fill out the required paperwork carefully; check the wrong box and taxes might be due. Finally, direct the funds to an IRA under your supervision or an adviser you justifiably trust (here are 13 questions to help make that determination).
How do you find out if a company allows an In Service Withdrawal?
1. Contact human resources and ask them, OR
2. Request a Summary Plan Description (SPD) from your 401k service provider, wait for them to send it, and scour the document looking for the section(s) on withdrawals, OR
3. Have a professional help navigate through the bureaucracy.