getting out of 401ks or company investing plans early

does anyone know of any strings that can be pulled to get out of 401k company saving/investing plans early before their regimented typical 'windows' where customers can switch or take action? my sister works for First Manhattan in NYC and can only make switches every 90 days. But there must be some loophole to this contacting the right people to get out or switch immediately ? Has anyone here every managed to circumvent the standard 30 or 90 day typical rules for switching in or out of funds etc ? and if so how?

does anyone know of any strings that can be pulled to get out of 401k company saving/investing plans early before their regimented typical 'windows' where customers can switch or take action?

my sister works for First Manhattan in NYC and can only make switches every 90 days. But there must be some loophole to this contacting the right people to get out or switch immediately ?

Has anyone here every managed to circumvent the standard 30 or 90 day typical rules for switching in or out of funds etc ? and if so how?

Are you sure about 90 days?
I recently helped a lady get her 401-K switched into a Money Market fund and as I understand their policy is that she can switch to other funds now but not back into the same fund within 30 days.

does anyone know of any strings that can be pulled to get out of 401k company saving/investing plans early before their regimented typical 'windows' where customers can switch or take action?

my sister works for First Manhattan in NYC and can only make switches every 90 days. But there must be some loophole to this contacting the right people to get out or switch immediately ?

Has anyone here every managed to circumvent the standard 30 or 90 day typical rules for switching in or out of funds etc ? and if so how?

Are you sure about 90 days?
I recently helped a lady get her 401-K switched into a Money Market fund and as I understand their policy is that she can switch to other funds now but not back into the same fund within 30 days.

Well I need to talk to her again today and find out more details, but she indicated it was 90 days. But perhaps there is a penalty that can be taken and then get out immediately..

90 days really seems ridiculous.

Edited by tradesurfer, 06 August 2011 - 06:16 PM.

Generally, whatever rules they have to switch within the 401k entity, you will have to obey. You can though borrow from your 401k, if you really need the cash out and pay it back with a little interest later. There is also the other option; you can also roll over a portion or all of your 401k (in cash) to a personal IRA at any time, of course you cannot go back thereafter. The only issue is if the company is matching your 401k investment, you would rather keep them in there and, the company may require a certain number of years of service to be able to have their matching contribution vested and allow you to roll over to a personal IRA. Generally you have to deposit them to a personal IRA within 60 days as I remember once you cash out.

I think arb is right - IIRC if you make an institution to institution transfer to a personal IRA, you lower your chance of being investigated by the IRS. You must calculate basis however, if the employer has matched funds.

I think the question is about switching funds within in a company sponsored 401-K rather than rolling over an existing IRA.

Here is an example of the policy of my friend's fund:
Market Timing Rules

Market timing rules have been implemented by the AMERICAN FUNDS The Bond Fund of America fund in order to prevent shareholders from moving in and out of the fund for purposes of timing the market. A summary of the rules that the fund has adopted are listed below. Further details can be found in the fund's prospectus.
Round trip definition:
A round trip definition identifies what transactions the fund looks for when determining if market timing rules apply. A round trip for the AMERICAN FUNDS The Bond Fund of America fund is defined as any transfer out of the fund followed by a transfer back into the fund.
Fund rules:
Each time a participant directed transfer occurs in the fund the market timing rules will be checked to determine if the transaction is in violation of the defined rules. The table below describes the results of each instance of a market timing violation based on the round trip definition described above. The rule only applies to the portion of the transfer that is included in the AMERICAN FUNDS The Bond Fund of America fund. The rule does not apply if the fund is included in a model.

If your sister has left her job and wants to roll-over her money into a new 401-K, then she must consider other rules:

If you participate in a 401(k) or similar retirement plan, are you fully vested? Sometimes waiting another few months or a year can make a big difference in how much money you'll take with you. The money you contributed yourself through salary reduction contributions is always 100% vested, but your company match usually vests over a period of several years, commonly three to five. Check your plan documents or ask your human resources department when you'll be 100% vested. By changing employers before being fully vested, you'll forfeit a portion of your employer's match and any earnings on that match.

http://financialplan...y/aa062001a.htm

Edited by Rogerdodger, 07 August 2011 - 03:50 PM.