Help with 401k?

Question

our company just sold out to another company...if i choose not to roll over my 401k to new company can i completely close my 401 account...i know i will get taxed and penalized...blah,blah, blah...but before company changeover i tried to close account out and they told me i would have to be 65 or get fired..although i am not fired, i no longer am employed by same company....do they have to know that i went with new company and still choose not to rollover 401?...i just dont know how this works...i just wanna close it out all together

Answer 1

They will probably automatically roll over 401K's for all the employees. . . especially if the new company chooses the same 401K management firm. That's usually what they do when companies change names, ownership, etc.

All you can do is ask. It might be possible if they're really reorganzing the company and considering the transfers to be "new" employees.

Answer 2

Your new company will probably have their own 401k firm, and will want you to roll it over into that account. You can choose to withdraw any monies that you have deposited plus any vested amount that your company has deposited at any time, but it usually a very bad idea depending on how much is in your account; you will owe taxes and penalties now, plus when you do your taxes next year, the amount you withdrew will be considered income and raise your taxable income, likely resulting in you owing to the IRS.

Answer 3

What you can do is dependent upon how the asset transfer took place. If it was a asset purchase you're out of luck, you have to leave the funds. But if it's an stock purchase you will be given the opportunity to liquidate and rollover. But you can't do anything until the sale is complete. That's why they wouldn't let you earlier. Not trying to hold assets but instead following DOL and IRS rules.

Answer 4

If you withdraw the funds, they will be taxed as ordinary income; and if you are less than age 59.5, you will be penalized 10%. Rolling the account over will avoid this.

The only time to have funds in a 401(k) is when you are contributing to it, so it makes no sense to roll your account into your new employer's plan; and you cannot be required you to do so. Rolling it into a self-directed IRA will prevent taxes and penalties, continue growing your money tax deferred, and give you much greater control and flexibility over your retirement account. Assuming the funds are invested in mutual funds, you can normally keep them in the same funds.

Answer 5

Nobody can tell you what to do with YOUR 401K. You own it, not the company. You should be dealing directly with the administrator of the 401K and the company is not involved.