401K Question....?

Question

My place of work closed it's doors about 6 months ago.I was wondering how long it took before you recive your 401K.I was on medical leave at the time.If it's awhile before I can get it,can I get it earlier for medical reasons?My place of work was a smaller branch of a large company that is still in business. Please,Please only knowledgable answers only.

Answer 1

This is a very important question. Some of the answers already in your list are correct, and some of them are wrong. Beware.

As several others have said, the 401(k) money is yours because of a law called ERISA. If the account disappeared in a bankruptcy, that's fraud and you have legal remedies.

You need to do 2 things, and I suggest that time is of the essense as some plan administrators will do something stupid like send you a check (that would cause problems for you). I have had this happen to me.

First, set up an IRA account to receive the money. This is called a "rollover". You can set up an IRA at a typical stock/bond/mutual fund brokerage like Schwab or TD Ameritrade. Use whoever you feel comfortable with. Do this quickly, and make sure that the institution understands that you are trying to set up an account to receive a ROLLOVER from a 401(k) plan. If you don't know how to fill out the paperwork, try to go to an office and talk to a customer service representative. This is a simple matter and they should be willing to help in order to get your business.

You might be able to fund your account by simply giving the new institution some information about your 401(k) plan. Ask your account representative or customer service.

Next, call the plan administrator of your current plan, and find out what if anything you need to do to have them release the funds into your rollover account. If you don't know who to call, look for the benefits paperwork you should have gotten when you joined the 401(k) plan. Some administrators will just accept a form from your broker, but Fidelity gave me a lot of "attitude" and simply refused to release my account until I did it their way, which took many weeks and phone calls.

I suggest calling soon as you do not want a distribution check to show up in the mail (or worse...). Make it clear that you want to roll the account over into an IRA.

Yes, you probably can get the money distributed to you for medical reasons (but there are SPECIFIC rules about this--ask the adminstrator if you really want to know), but I suggest that you NOT do this unless in truly dire need. This is usually a bad idea due to penalties.

Answer 2

ERISA laws protect your retirement money.

As soon as you separate from a company you have a right to begin the process to receive your distribution fro the company's 401(k) plan. A subsidiary's bankruptcy has nothing to do with your 401(k), as those assets are held in trust by a mutual fund company (not by your bankrupt company).

Two approaches. first, you receive a statement of your account. On that statement there is a toll-free 800 number you should call on Monday to begin the process. Best bet is to "roll-it-over to an IRA, to avoid taxes and keep the money growing tax-deferred; however, if you NEED the money, you will pay a 10% early withdrawal penalty, and taxes at your ordinary income rate.

Second approach would be to call Human Resources at the Large Co. that is still in business and tell them that you want to move your 401(k) money. They will help you get it going. They have no interest in holding your money.

Good luck.

Answer 3

Your 401k is YOUR money. No one can touch it but you.

The money that the company put in, if you are vested, is yours as well.

You can get the money prior to retirement by several ways, call your funds manager to find out. Some ways have the taxes taken out for you, others don't. Some you have to pay back, others, you don't. Most have an early withdrawal penalty.

Answer 4

Very simple;

Choose where you want the funds to go (Schwab, Fidelity, Vanguard, T. Rowe Price etc.).

Have them contact your x-employer.

Sign the appropriate forms.

Transfer to a IRA. DO NOT TAKE CASH. Do a "rollover" only.

(or.... call the headquarters and ask them... then pick a new custodian (Schwab, Fidelity, Vanguard, T. Rowe Price etc.).

Answer 5

Really all depends on your particular company policy. There is no standard 401K policy on how long...all depends on company. If your company went BK, may not get any at all... check out www.401k.com for more info.

The company I work for used to be 180 days after separation. This year they changed it to 90. So it just all depends.