CRPC Practice Exam 2025 – Complete Test Prep Guide

Rolling an IRA into a qualified plan, such as a 401(k), provides participants with the significant benefit of being able to take loans from their retirement account without facing immediate tax implications. In many cases, qualified plans allow participants to borrow against their vested balance, offering them access to funds for pressing financial needs while maintaining the tax-advantaged status of their retirement savings. This access can be advantageous as it provides liquidity without incurring penalties or taxes that would typically apply if funds were withdrawn directly from an IRA.

Despite the attractive benefits of loans from qualified plans, it is essential to understand that there are rules and potential consequences associated with their repayment. Failure to repay a loan may lead to it being treated as a taxable distribution, which could incur taxes and penalties.

The other considerations related to immediate access to funds, guaranteed returns, and reduced fees do not fully capture the unique advantages offered specifically through this rolling process into a qualified plan.