Transfer current employer 401k to self-directed 401k for real estate investing

INQUIRY: I want to re-explore moving my wife’s 401 K which is employer based to a self-directed 401k. Thanks.

She now works for Disney Industries which bought Lucas Films.  As far as I know her 401K hasn’t changed and still has Employer matching contributions of up to 6% of income.  It is one of those target maturity or horizon funds, whatever they’re called, designed to mature at a future date, in her case I think 2020.  We would rather by Trust Deeds or Real Estate.  Any thoughts on how to switch?  Don’t know if Disney cares about a switch.

ANSWER: Chances are your spouse will be restricted from transferring her current 401k sponsored through her current employer (Disney or Lucas) to a self-directed 401k for investing in real estate unless she is age 59 ½ or older. Reason being, because Disney is the 401k plan sponsor they ultimately have a say on whether or not funds can be transferred out of the their sponsored 401k employer plan while the participant is still employed. Nonetheless, if she is of retirement age, defined as age 59 ½ or older, as a plan participant she would meet one of the triggering 401k plan distribution requirements and therefore would be able to at the very least transfer her 401k salary deferral (employee) contributions to another retirement plan such as a self-directed 401k.  Ultimately, she should obtain a copy of the current 401k plan document from Disney as it will contain the 401k plan distribution rules.

Thanks, Larry O. in California

About Mark Nolan

Each day I speak with energetic entrepreneurs looking to take the plunge into a new venture and small business owners eager to take control of their retirement savings. I am passionate about helping others find their financial independence. Having worked for over 20 years with some of the top retirement account custodian and insurance companies I have a deep and extensive knowledge of the complexities of self-directed 401ks and IRAs as well as retirement plan regulations. Learn more about Mark Nolan and My Solo 401k Financial >>


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