I am planning to leave my company I want to take my 401K and invest it in my own company. CAN THIS BE DONE?

Do you mean cash out? Yes, but there will be heavy tax implications.

The only way to get money from your old 401(k) to invest in your own company is to cash out. This will cost you both penalties (10%, again assuming you are under 59-1/2) plus income tax. You should figure on ending up with about half of the account value, with the rest being taken by Uncle Sam. Because you have left the company I believe you do not have the option of taking a loan from your old 401(k).

You'd be much better off finding another source of funds for your investment.

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Originally Posted by mlobaugh

I am planning to leave my company I want to take my 401K and invest it in my own company. CAN THIS BE DONE?

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I am retiring and would like to transfer my assets (currently held in my companies profit sharing plan) to my IRA. The assets are held in several fixed annuities under my name. Some of the fixed annuities still have surrender periods. For the annuities that don't have surrender periods, do I just ask for cash surrender w/ the checks payble to my IRA? For the annuities that stillhave surrender periods, do I have to make them change of ownership (my new traditional ira as owner?)? Please advise.

Best bet contact a financial planner to help you. You have a lot at stake lets do it right the first time.

I think you will find that to move the annuities from their current administrator you will have to close them out, and so you will pay the surrender charge on them. As you note, it's best to have the profit sharing plan transfer miney directly to the new IRA - this will be a rollover IRA, and by having the money transferred directly you will not get hit with taxes or penalties by Uncle Sam. I suggest you talk with a customer service rep at the company where you will be setting up the rollover IRA to see what they say about rolling money from an annuity.

On a side note - it's too late now but an annuuity is one of the worst investments to have in an IRA or tax-advantaged account like your profit sharing plan or 401(k). The only reason to invest in an annuity is to get the tax-free compounding, but these accounts are already tax free, so what's the point? And as you've seen annuities usually have onerous surrender charges, high fees, and it's usually very difficult to compare the return you get against standard benchmarks like the S&P 500.