401k – Moving $

[admin]

Quick question here that I am reasonably certain I know the answer to, but just want to make sure:

Within a 401k, can you buy and sell different funds without paying tax, or forfitting any of the benefits of the 401k? EG: My 401k has 10 available funds. Can I move my money from one to another without being taxed this year for gain etc?

[(former)FormerSanDiegan]

Yes, moves inside a 401K between investments have no tax consequences. However, you may have to pay fees, loads, or commissions.

[Happy renter]

You can change any fund and as often as you want for the 401K account. You don’t need to pay any tax for the capital gain now. However, the transcations have to be in the same account. You can’t move money from one 401K account to different 401K account.

Some people have 2 different 401K accounts since they worked for different company before. Ususally, if you leave the company, you can roll over your 401K money from your old company to the new company.

Hope it can help!!!!

[Anonymous]

Thanks! This really helped and confirmed my earlier suspicions.

[nla]

“You can change any fund and as often as you want for the 401K account.”

Not true to all. On my 401K, you can only do so much on a given quarter.

[Happy renter]

I think it depends on what investment company you have for your 401K. My allowed me to change anytime I wanted.

[Happy renter]

One more thing: Other than the fees, loads, or commissions, some funds charge redemption fee if you hold the fund less than a period of time. Different 401K investment companies have different funds, policies and fees. So, you have to be very careful.

Example:
A 2% redemption fee may be imposed on shares held for 3 months or less. Performance shown does not reflect this redemption fee and, if reflected, performance would have been lower.

[Anonymous]

If your 401K plan administrator only allows quarterly liquidity, aka, you can only change investments once per quarter: you have a shitty employer. You need to write a letter to your company human resource director demanding changes. If this is a small company you may be able to sue them for breach of fiduciary duties under the pension protection act of 2006.

[(former)FormerSanDiegan]

Happy renter makes a good point. Check into whether you have “A”, “B” or “C” funds each has their own load schedule. Some are front end loaded (you pay a sales charge on purchase), some are back-end loaded (You pay a sales charge upon selling).

[Author]

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