Most plans now allow for an in service withdrawal to a rollover IRA without tax penalty. You can always purchase CDs from your local credit union at that point from inside your IRA rollover if you don’t want to enrich Wall St bankers.
Otherwise, or if unavailable in your plan you can always quit your job or retire (separation of service) as this is the only other option to roll it out this escaping the 10% early withdrawal tax penalty. Some other options are plan loans, first time home purchase, disability and possibly education for kids, I forget.
Just a side note:
From a financial planning perspective contributing to the plan allows you to reduce your taxable earnings by the amount you contribute lowering your taxable income/tax burden in that year. The offset or long term benefit is that these investments grow tax free while in the plan, yet Uncle Sam always gets his piece eventually (once assets get distributed from the plan itself if not rolled over to an IRA Rollover). At 72 eventually you’re forced to take out what’s called an RMD or required minimum distribution so that it can be taxed from the IRA Rollover as income. There are a few ways to give these assets to beneficiaries to then lower this tax burden, yet your kids or surviving spouse will ultimately get taxed, just at a lower amount. Of course this later option is only for those who don’t need their retirement assets.
I advise you keep it in and continue to dollar cost average and grow your retirement nest egg per contributions as this is the easiest way to lower taxable income, grow assets tax free and at the same time have access later supplementing an unknown availability of social security benefits in retirement. You don’t have to buy mutual funds in the plan or participate in the stock market perse. There is usually an option for a money market fund (though brokerages use these to finance margin loans to clients, traders, etc) as a low interest more stable option, but this is like having a bank account at an investment bank they use on the backside to financially engineer more dough. Some plans now have a guaranteed fixed annuity, CD option or other guaranteed option, but that’s rare.
Most plans now allow for an in service withdrawal to a rollover IRA without tax penalty. You can always purchase CDs from your local credit union at that point from inside your IRA rollover if you don’t want to enrich Wall St bankers.
Otherwise, or if unavailable in your plan you can always quit your job or retire (separation of service) as this is the only other option to roll it out this escaping the 10% early withdrawal tax penalty. Some other options are plan loans, first time home purchase, disability and possibly education for kids, I forget.
Just a side note:
From a financial planning perspective contributing to the plan allows you to reduce your taxable earnings by the amount you contribute lowering your taxable income/tax burden in that year. The offset or long term benefit is that these investments grow tax free while in the plan, yet Uncle Sam always gets his piece eventually (once assets get distributed from the plan itself if not rolled over to an IRA Rollover). At 72 eventually you’re forced to take out what’s called an RMD or required minimum distribution so that it can be taxed from the IRA Rollover as income. There are a few ways to give these assets to beneficiaries to then lower this tax burden, yet your kids or surviving spouse will ultimately get taxed, just at a lower amount. Of course this later option is only for those who don’t need their retirement assets.
I advise you keep it in and continue to dollar cost average and grow your retirement nest egg per contributions as this is the easiest way to lower taxable income, grow assets tax free and at the same time have access later supplementing an unknown availability of social security benefits in retirement. You don’t have to buy mutual funds in the plan or participate in the stock market perse. There is usually an option for a money market fund (though brokerages use these to finance margin loans to clients, traders, etc) as a low interest more stable option, but this is like having a bank account at an investment bank they use on the backside to financially engineer more dough. Some plans now have a guaranteed fixed annuity, CD option or other guaranteed option, but that’s rare.
Good luck.