Can I withdraw 401K funds and invest them myself without penalty?
There are three cases where I do not think it is wise to roll over your 401K. The first case is when you leave your former employer after the age of 55 and are under the age of 59&1/2. If you meet this criteria you will not have to pay a 10% penalty from your 401K but will have to if you take money from an IRA. Once you reach 59&1/2 by all means roll it over. The second case is where you have less than a thousand in your 401K and have no IRA anywhere else and your old employer will let you keep it in their plan without any fees. There are very few institutions which will accept less than one thousand dollars. The last reason is that you know you do not have the will power not to do something unwise with the money. In a self directed IRA you can buy penny stocks, options, and host of high risk investments. If you are like most people and do not fall into the above go to step two.
