what is an in service withdrawal 
an in service withdrawal occurs when an employee takes a distribution from a qualified employer sponsored retirement plan such as a 401 k account without leaving the employ of their company this may occur without a tax penalty any time after the employee reaches age 59 or if the employee withdraws up to 10 000 to purchase their first home declares a hardship or establishes extreme financial need in some cases in service withdrawals can be made without these events occurring not every retirement plan allows in service withdrawals but in 2019 about 70 of those available in the u s did offer this option under certain conditions 12understanding in service withdrawalsby law normal withdrawals from retirement plans can be made as a result of employment change hardship and documented financial need or once the employee has reached 59 years of age 3in service withdrawals are a little different if the plan allows in service withdrawals then an employee can take a distribution merely for the purpose of pursuing different investment options that they deem to be more suitable for them this is usually done in the form of an allowable rollover from the plan to a previously existing 401 k account or a new traditional individual retirement account ira this provision can be tricky for example rolling over savings from a 401 k plan to a traditional ira is allowed by law if the money being moved is from employer contributions either matched money or profit sharing accumulations the money being rolled over cannot come from pre tax contributions unless the employee is 59 years old or older 4the solution is to know precisely what your plan allows and what it does not finding out such details might be a little harder than it sounds for some employees because a company administering a company sponsored retirement plan has an incentive to keep participants from taking money out of their accounts early the government agrees that employees who are saving for retirement should be very careful about withdrawing money early these two factors combine to inhibit your ability to find out the details of your plan s in service withdrawals because your employer might not advertise such provisions and the government doesn t require them to do so to find the information you need you ll likely have to search a bit online or make a phone call to your 401 k helpline 