I can't take money out of my 401K?

OK I know the first answer will be don't touch it, but here is what the deal is. I have a retirement account in my name that has several hundred thousand, that is my main retirement. I have a 401K, however with around 25K that I want to transfer out of my employer's and into a new roth ira on my own. My employers choices of investments are horrible and have done worse and worse each year. However, they tell me that I can only recieve MY money if if either quit, or am being forclosed on my home, or other defined urgent need. Can they really do this? Can they, or the rules that govern 401K's restrict my access to my money?

If there is no provision in the plan for in-service distributions or loans, then yes, your only options are to terminate your employment or get qualified for a hardship distribution.

If you don't like the investment options, stop contributing. Or just use the money market option.

Yes, this is perfectly reasonable and common.

The account is restricted.

Yes, they can and will restrict your access, that's just part of being in an employer's 401k.

Also, you must remember you can only contribute $4k for 2007 (if you act before April 15th) and $5k for 2008 to a Roth IRA. If you make between $101k and $116k a year, you would be able to contribute even less each year. And if you make more than $116k, then a Roth IRA is totally out of the question.

you can't just take it and even if you could, why would you roll it over to a Roth IRA? - you would lose about 1/3 of the money to taxes and penalty as opposed to rolling it over to a regular IRA . they must have at least a money market fund you can move money into until the stock market stabilizes

It's the government's rules that restrict your ability to take a distribution to certain circumstances. They are simply following the rules required by the IRS. Lobby for new investment choices...but first figure out why they are using the entity that they are using...is it cost (sold to employer as free), is it because the owner of your company's neighbor and friend is the financial advisor? Are the funds that bad in comparison to other reasonable funds? Many things to think about before you rock the boat.