401(k) Plans
Why did my former employer send me my 401(k) account balance without
my asking for it?
Your old employer can force a distribution upon you if your retirement
account balance is less than $5,000.
Why would I want to rollover my 401(k) funds
left with my previous employer?
Greater control and more investment choices are generally the reason that
retirement plan participants roll over their account balances. You may
have other reasons, as well.
How do I convert my 401(k) account to a Roth IRA?
A Roth IRA conversion is a two-step process. You cannot rollover
your 401(k) funds directly to a Roth IRA. First, you must do a Rollover
IRA. After that, you can transfer your Rollover IRA funds, called
a conversion, to a Roth IRA. Caution: You must pay taxes on any
money that goes into a Roth IRA
Can my employer block my 401(k) withdrawal while I am still
employed there?
Yes. One of these events must occur before you are allowed
to take a withdrawl out of a 401(k) com: a layoff, illness, disability,
retirement, death, or severance from employment. For more information
on the particulars of your plan, refer to your copy of the "Summary
Plan Description (SPD)" that you should have received when you enrolled
in the plan. If you don't have an SPD request a copy from your personnel
department.
Can I withdraw my 401(k) account when I leave a company?
Yes. Your employee contributions are always yours and can go with
you when you leave your company. Your employer's contributions,
however, may not be yours to take with you. Some employers give
you ownership, called vesting, of their contributions immediately.
Others phase in your ownership to their contributions over several
years. Special circumstances such as death, disability or the plan's
termination usually give you 100% vesting at the time of the event.
So, your plans' vesting schedule will determine how much of your
employer's contributions you can take with you when you leave that
employer.
Can I borrow against my 401(k) account after I leave my employer?
Most plans will not allow borrowing from your 401k account after you leave the company. Contact your old employer's Human Resources or Benefits Department and ask them that question. If you have a business you may qualify for a Solo-401K with loan feature. |
