Glossary
In-Service Distribution
An in-service distribution is a withdrawal or rollover taken from an employer retirement plan while the participant is still employed there, where the plan's rules allow it.
Availability depends entirely on the plan document. Many plans permit in-service rollovers of certain money types — often after age 59½, or of employer contributions and rollover balances at any age — while employee deferrals are usually locked until 59½ absent hardship.
Why it matters in practice
For employees past 59½, an in-service rollover to an IRA can open access to broader investment choices or lower costs without waiting to retire — though it also means leaving whatever advantages the plan has, such as institutional pricing, ERISA creditor protection, and (for those working past RMD age) the still-working RMD exception. The plan's summary plan description states what is allowed; the trade-offs deserve a genuine comparison rather than a default in either direction.
Related terms: Rollover · 401(k) · Hardship Withdrawal · IRA (Individual Retirement Account) · ERISA