In-Service 401k Transfer – Diversified Insurance Brokers

Retirement planning isn’t just about saving—it’s about protecting your assets. An in-service 401(k) transfer to an annuity helps reduce market risk, diversify your portfolio, and secure guaranteed income for the future.

What is an In-Service 401(k) Transfer?

An in-service 401(k) transfer lets you move a portion of your retirement savings from a 401(k) plan into an IRA or annuity without leaving your current employer. Unlike a standard 401(k) rollover, this strategy provides flexibility and access to additional retirement planning tools while you’re still working.

Why Consider Transferring to an Annuity?

For those nearing retirement, protecting and diversifying a retirement portfolio is critical. Annuities offer benefits like lifetime income, growth potential, and protection from market volatility, making them an appealing addition to a diversified retirement plan. Transferring a portion of your 401(k) into an annuity creates a secure income source that’s immune to market downturns, providing a financial cushion.

Key Benefits of an In-Service 401(k) Transfer to an Annuity

Diversification and Stability

Traditional 401(k) plans primarily invest in mutual funds, exposing your retirement savings to market risk. Moving funds into an annuity can help diversify your income sources. Unlike the stock market, which can fluctuate, annuities provide a fixed or indexed income, giving you stable returns over time. This diversification reduces reliance on market-driven assets, helping to secure a stable income stream for retirement.
Maximizing Lifetime Income: Timing is Key

The earlier you transfer your funds into an annuity, the higher the potential income payout. Annuities typically offer higher payouts when the investment has more time to grow within the insurance company’s portfolio. Moving funds sooner benefits your annuity by compounding the interest, potentially leading to a significantly higher lifetime income when you retire. For example, suppose you’re in your late 50s or early 60s and opt for an in-service transfer to an annuity. In that case, the funds will have several years to accumulate value, leading to a better payout rate than if you waited until retirement.
Protection From Market Volatility

When nearing retirement, market volatility can become a serious concern. Annuities provide guaranteed income that isn’t affected by market downturns, offering a stable cash flow no matter what happens in the stock market. By transferring funds to an annuity, you gain peace of mind knowing a portion of your retirement income is shielded from economic fluctuations.

Types of Annuities for In-Service 401(k) Transfers

Fixed Annuities

Fixed annuities offer a guaranteed interest rate and steady income stream, making them ideal for risk-averse individuals. If security is your primary goal, a fixed annuity can provide reliable returns without market exposure.
Indexed Annuities
Variable Annuities

Variable annuities provide growth by investing in sub-accounts similar to mutual funds. They have higher growth potential than fixed or indexed annuities but come with more risk. However, most variable annuities offer income riders that guarantee a lifetime income stream, regardless of market performance.

Steps to Complete an In-Service 401(k) Transfer to an Annuity

Check Eligibility

Confirm with your employer’s 401(k) plan administrator that an in-service transfer is allowed. Not all plans permit this type of transfer, so it’s essential to verify eligibility.
Consult a Financial Advisor
Choose Your Annuity
Initiate the Transfer

No Obligation Consultation

Take Control of Your Future with an In-Service 401(k) Transfer

Still working but want more control over your retirement dollars? An in-service 401(k) transfer allows you to move a portion of your retirement savings into a fixed annuity—without leaving your job. The earlier you act, the more time your annuity has to grow, increasing the potential for higher lifetime income and greater long-term stability.

By transferring funds to an annuity while you’re still employed, you can lock in guaranteed income, reduce your market exposure, and create a more predictable retirement strategy. This move adds a layer of diversification and protection that most 401(k) plans can’t provide.

Discover Your Portfolio Risk—Before the Market Does

Use our Risk Analyzer Tool to uncover hidden vulnerabilities in your current portfolio. Don’t assume your investments are safe—learn your true risk tolerance and take control. Gain clarity, reduce exposure, and protect your retirement from unnecessary market losses.

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