The theme this week on the One Minute Retirement Tip podcast is How to get the most out of your 401k plan. You may be saving and getting the match, but are you fully taking advantage of all the amazing benefits that your 401k has to offer you? 

Yesterday I talked about consolidating old investment accounts into your 401k. Today, I’m talking about the other side of the coin - but an equally valuable feature that almost no one knows about - and that is the in-service distribution. 

Generally, you can’t take money out of your 401k plan until you change jobs, retire, or die. But most plan rules allow for you to take your money out of your 401k while you’re still working. You may hear this go by a few different monikers - an in-service distribution, in-service withdrawal, or in-service rollover. 

The only requirement is that you have reached the age specified in the plan when in-service distributions are allowed. This could be age 59 ½ or a different age, sometimes older. You’ll want to find out first if your plan allows for in-service distributions, and at what age. Even if you take an in-service distribution, you can continue to save an invest in the plan with future contributions, but you have the opportunity to rollover your current balance to an IRA, which could be a great opportunity. 

If you have a garbage 401k plan with terrible investments and high fees an in-service distribution is your ticket out to greener pastures. 

Even if you have a decent 401k plan, you desire more control, or maybe you would like to invest in individual stocks or other investments that aren’t offered in your 401k menu, or you’re working with a financial advisor who can better implement a cohesive strategy with your portfolio with more control over your assets - these are all reasons to consider pulling your money out of your 401k while you’re still working if that’s an option for you. 

That’s it for today, Thanks for listening! My name is Ashley Micciche and this is the One Minute Retirement Tip.

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Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance