i lost my job but dont know what will happen to my 401k account?

Question

will they just give me a check for the money i put it in or will it just sit there

Answer 1

I'm not quite sure doll,but i imagine you are able to access it

Answer 2

You will have to take the money out of the current 401K account. Now you may have a few months to do that. You can "roll it over" into an IRA (individual retirement account) and avoid tax responsibility for it. If you take the money, then you will owe income tax on the full amount plus a 10% penalty for early withdrawal. So, rolling it over into an IRA avoids the tax and the penalty. If you have not withdrawn the money and you get another job with a 401K benefit, you can also roll over the first 401K into the new one.

The company handling your current 401K will be able to help you set up an IRA if you want them to do it for you.

If you are going to take the money for your use, make sure you have them withold the tax, so that you only end up paying the 10% penalty at the end of the tax year.

By the way you can avoid the penalty for certain hardships--like medical costs or I believe (not sure on this one) the purchase of a first home.

Also, the people above are wrong, you can't just let it sit there. 401K is an employee benefit, it ends when your employment does. You need to move the money, either into another retirement investment account (IRA, or 401K if reemployed) or into your personal accounts.

Answer 3

last poster is obviously just a paid shill....have the no shame!!!

What will happen to it is dependent upon the size of the account. If it's over $5,000 it will sit until you take a distribution or turn age 70 1/2 at which time they will pay you out. Either in whole or in installments depending upon how the document reads

If it's over $1,000 but less than $5,000 they can force you out but they have to roll it into an IRA. They absolutely can not pay you in cash without your approval. Most companies do not do this but some do.

If it's under $1,000 they will send you a letter with paperwork telling you to take your distribution or they'll pay you out in cash. If you want to roll it over and avoid taxes you'll need to have an account set up. At this level, I'd start the IRA at your local bank. It's simply not high enough to move to a mutual fund. Fund minimums would likely keep you in the money market...if that's the case you may as well be in a CD at your local bank.

If you're over the $1,000 you have time to do your research...If you're under 1,000 you still have time to research AFTER you've put it in the bank's IRA.

Answer 4

You don't want to wait til they cut you a check because it will be with 20% of taxes withheld and that is not favorable for you.

You need to do a "rollover" to roll your 401(k) balance to a traiditional IRA account which is a tax-free transfer.

Call the 1-800 customer service line that should be printed on your 401(k) statement and tell the agent that you wish to roll over your existing 401(k) balance to a Traditional IRA at Sharebuilder.com.

You will need to set up a traditional IRA account at http://www.sharebuilder.com

Then you can invest in stocks (companies).

Answer 5

Depends on the company policy. Some will just cash it out taxes and penalties and send you a check after 90 days. Some will just let the money sit there and really no one is managing it. I recommend that you roll it over which will avoid all taxes and penalties and then you manage it. I do this all the time for my clients. Very easy.

Answer 6

Cashing out a retirement plan is a stupid financial move. That money should be left alone to compound and grow free of taxes until you retire. If you are having financial troubles, spend less. Get rid of cable TV, cell phones, and maybe internet services. Just doing these things could save you hundreds of dollars a month. You can save even more by not going out to eat, cutting down on entertainment, and getting down to bare necessities. Nobody knows how the economy will look even one year from now; but it is likely to fluctuate and grow over a long time frame. PS: Your writing skills stink. Maybe this is evidence that you are a dim bulb if you can't understand that you should never withdraw from a retirement account.

Answer 7

It is your choice on how to do this. Here are your options. You can take it and pay taxes on it. You can leave it there and wait until you get another job and roll it over there, or depending on where you live roll it into an IRA. If you are in one of the states that have a state income tax, be careful. It would be safer to leave it and wait to roll it over into another 401k. Hope this helps.

Answer 8

Depending on your company's policy, you can either just let it sit in the existing 401k account or roll it over into an IRA.

Answer 9

most companies will let you leave it there if it is over $5k and make you get it out of thier plan if it is less - before they send you the "get your money the hell out of here" letter, I would open your own IRA account and ask for "rollover" paperwork from your former employer to move the money into your own IRA account - when you roll the money they should not withhold anything in the form of taxes or penalties, but if you don't ask for "rollover" paperwork and just get "distribution" paperwork they will probably withhold taxes + a 10% penalty from the IRS as well...make sure to roll it!

Answer 10

It's always best to roll over to your personal IRA as soon as possible