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Can I put a 401(k) into my pension before I start taking payouts?

Can I rollover a 401(k) into my pension?

Financial Planning, Pensions, 401(k)
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April 2017

Pensions, (defined benefit plans) and 401(k)s (defined contribution plans) are usually kept apart. However, there are a few cases where those dollars can be combined. It is more common for employers to allow lump sum distributions from pension plans that can be rolled over into an IRA, as opposed to allowing contributions from outside sources like a 401(k).

The one exception that I am aware of is when a pension plan allows employees to "buy years" into the pension system in order for the employee to increase their pension benefit. I have seen this available mostly in public school retirement systems. Be aware that if you can deposit a lump sum into a pension system, it is unlikely you will have any access to those dollars again. So, make sure you are prepared to part with the balance. Also, make sure it is in your best interest by comparing the monthly payment you could get from your 401(k) money, versus the increase in monthly amount from your pension.

Every pension and 401(k) has it's own unique plan design. Consult with the plan administrator to be sure of your options.

Hope that helps, and best wishes on your retirement.

 

Wyatt A. Moerdyk, AIF®

April 2017
April 2017