401k, what happens when leave the job.

[Mayfriday0529]

I think i might leave my current job by July. What happens to the 401k plan? Do you just transfer it over to your new job or IRA?

When you leave the job, is it the responsibility of the job to provide you with paper work to transfer your funds, or you have to do it on your own?

 

[spacejamz]

you need to touch base with your plan adminstrator as each plan has its own set of rules (this applies to your current plan as well as the one at your new place of employment).

If you can't roll it over to your new employers 401, you can still roll it over to an IRA so you are not penalized for it.

good luck...

 

[RossMAN]

You should ask your 401k's plan administrator.

At my job it depends on your 401k's vested balance:
Under $5,000.00 it's automatically cashed out and you're sent a check
Over $5,000.00 you can cash out or roll it over to another 401k plan

 

[Viper GTS]

Typically under $5K gets cashed out unless you specify somewhere to roll it too, over $5K can stay.

I'll be cashing mine out here in a few months when I leave, it'll be going straight to the CC companies.

Viper GTS

 

[usold]

do you have any vacation or sick days left?

can you use the sick days right before you quit & still get paid for them? AND.. if you quit, do they have to pay you for those vacation days that you earned?

 

[Mayfriday0529]

Yes mine is under 2000 dollars. I dont know about the new job rules yet i have a 90% chance of getting the job and won't know until June 28 so i'm planning ahead just in case.

 

[Ynog]

Like Rossman and Viper said 5K is usually the threshold. As it is with my company as well.

Whatever you do, don't take cash unless you need it. The penalites aren't worth it.
Just find a IRA to roll it to and you will be all set.
Though your HR person should be able to give you the best advice, as your probably not the first person
who has worked with your company that has been in this situation.

 

[FeathersMcGraw]

If you're forced to cash out your balance when you leave the company, make sure you coordinate with your plan administrator to roll it directly over to your new plan or a personal IRA. If they cut you a check for your account balance, you're going to pay early withdrawal penalties (I'm not an accountant, but there may also be tax penalties).

 

[Mayfriday0529]

Originally posted by: usold
do you have any vacation or sick days left?

can you use the sick days right before you quit & still get paid for them? AND.. if you quit, do they have to pay you for those vacation days that you earned?

Its funny, actually i have vacation coming up last week of june, whether they pay me or not i dont care i might not actually leave the job until middle of july but will know about the other job at the beggining of july.

 

[Spamela]

i converted mine to a Roth IRA. the taxes were killer, but
we had 4 years to pay them.

 

[Viper GTS]

Originally posted by: FeathersMcGraw
If you're forced to cash out your balance when you leave the company, make sure you coordinate with your plan administrator to roll it directly over to your new plan or a personal IRA. If they cut you a check for your account balance, you're going to pay early withdrawal penalties (I'm not an accountant, but there may also be tax penalties).

The early withdrawal penalties are 10%, tax will take 20% up front but you would receive a refund (or owe) appropriate taxes on it at the end of the tax year.

The tax penalties are no big deal, you would have paid taxes on it eventually anyway.

The 10% sucks, but if you need the money it's not TOO bad.

For me being debt free (or nearly so) is worth more than my ~$5K 401k balance.

Viper GTS

 

[Mayfriday0529]

So lets see

I can choose to roll over to an IRA account, which required 2000 dollars to open which don't have yet so i will have to pay the difference.

or roll over to a new 401k with new company.

or my company will give me a check and i have to pay fines for that?

i would like to roll over to a IRA with no fines is that possible?