Retirement Planning/Cashing out a 401k


My father, who is 76 and is still employed, wants to cash out his 401k.  He needs the money to buy a 1 story house so my mother (who has terrible back problems) will not have to deal with all the stairs in their current house. His employer told him he could take a loan out but not cash it out as long as he is still working there. He has worked there for 20+ years and does not plan on retiring anytime in the near future. Does this sound right to you??? I read somewhere that if you are over the age of 70 1/2 you could cash it out without a penalty. Is there a way he can get his money?


Thanks for the question.

Generally speaking, once an individual turns 59 1/2 in most plans they are eligible to roll the funds into an IRA or take distribution without penalty.  However, the plan document for the employer your Dad works for may not have that benefit.  I also know that many times the 800 number or the HR department do not have adequate training in this area to correctly answer these types of questions.

We are happy to help you with a no fee for the initial compensation if you wish.  More than likely it will only take 1 or 2 calls and you'll have a better idea of what you can do.

Please feel free to call us at 512 528-0801 and ask for David.

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Daniel Cordoba


I am able to effectively and reliably answer questions that are related to self-directed IRAs, funding a business with an IRA or 401k and business exit strategies. I cannot answer questions that are considered to be direct investment advice or speculation on return on investment. I will not and cannot answer questions that are related to securities. I will not and cannot answer questions that require specific legal advice.


My overall expertise, media information and experience can be viewed on my personal page I have been in the self-directed IRA advisory business since 2000; which is an eternity for our industry. I have been quoted, featured or referenced to by many of the major media such as ABC World news, Kiplingers, Forbes, Wall Street Journal and many other media outlets.

Author: From Wall Street To Main Street, Your Guide to Self-Directed Investing ISBN 978-0-615-22308-7 Author: From Wall Street to Main Street, How to Determine the Self-Directed IRA or Self-Directed 401k(k)Plan that Fits Your Needs ISBN 978-0-557-17478-2

BA Business Management, University of Phoenix 1985

Awards and Honors
2009, FIVE STAR Wealth Manager Client Satisfaction, Crescendo Business Services/Texas Monthly Magazine 2009, 2010 Best of Local Business Award, US Local Business Association

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Unable to do so contractually.

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