Client is 41 years old. Client has a 457. Client is thinking about retiring at age 45, and wants to know if he can move 457 into an IRA where assets can be professionally managed, can he subsequently take IRA money and roll it back into the 457 to take a distribution, assuming the plan allows it?
More specifically, would a 10% early withdrawal penalty be assessed in this scenario?
I think it is important to note that this client is a “Special Risk Employee” (firefighter).
He is under the age of 59.5, more specifically he is 42 years old.
Client wants to take 457 money, transfer it to an IRA for professional money management. He wants to keep a portion of the money inside the 457 to keep it open.
In the future, before he turns 59.5, can he roll IRA money (which came from the 457 to begin with) back into the 457 and subsequently take a penalty free distribution?
There might be something mentioned about this in the Pension Protection Act of 2006.