All About Pensions

6 Responses to “What Happens To My 401k After I Quit My Job?”

1. Mr.Snrub on January 26th, 2010 at 5:50 am

   Now that you don’t work there, you can’t contribute to it anymore. You are entitled to the money you put in there though. The “vested” part only refers to any money the company added to your account while you worked there (like when they say “we match your first 3%” or whatever). That 3% they added to your account as an incentive to get you to participate will not be yours anymore because you didn’t stay for the 3 years to be vested. The money that you put in there though is your money and you are entitled to it.
   Most likely, you should be able to do what is called a “roll over” if you are at a new job that also has a 401k program. They will take the money you put in your old job’s 401k and put it towards your new job’s 401k.
   Your other option is to put it into a “Roth IRA” which is another retirement type account.
   Whatever you do though. DON’T just take the money out of the 401k and just put it in your pocket!!! The government gives penalties for withdrawing your retirement savings from your 401k before you retire. You will also have to pay taxes on the money if you pull it out and stick it in your pocket. You really should look into an IRA or a rollover to avoid fees and taxes because you’ll lose ALOT of money if you don’t.
   Also, I’m pretty sure you have the option of keeping the money in your company’s 401k too. If you can’t seem to get the money out of the company’s 401k, it can technically just stay there even though you don’t work there anymore. It can continue to grow and gain interest until you do retire and then you can withdraw it without penalties.
   At any rate, this stuff can be confusing and I am definitely not an expert on it, so I’d double check my answer. I’d look into getting someone to help you who knows exactly what their doing with this stuff. That’s your money though. Make sure you get it. I’d talk to a financial advisor or something like that.

2. Doctor Deth on January 26th, 2010 at 12:25 pm

   1-You can;t make any more deposits into the 401k – you can only do that thru payroll deductions.
   2-if you were only in it 6 months, you probably don;t get to keep any of the company match, just your contributions, plus earnings on that. – they will probably cash it all out for you – open an IRA and have the IRA company do a direct rollover into the account (you will just need to tell them the company 401k administrator’s name (Fidelity, Vanguard, whoever) and your ID number – probably your SOc Sec #- do not have the check go to you or they will withhold 20% for taxes and unless you replace that 20%, it will be counted as income to yu, plus a 10% penalty for early withdrawal.

3. gafpromi on January 26th, 2010 at 6:23 pm

   You should be fully vested in terms of whatever YOU paid into it out of your pocket. If the company paid anything in for you, that is what will not be vested. After 6 months you may not be vested at all, but you should check with your Human Resources. The 401K just sits there, it belongs to you but you can’t pay any more into it. When you get another job that offers 401K, you can rollover the old one and it will get wrapped up in the new one.

4. Kiplinger Answers on January 26th, 2010 at 10:32 pm

   Upon leaving the company, you can transfer your balance tax-free to an IRA. Distributions not rolled over are taxed as ordinary income, in your top tax bracket (except to the extent you made after-tax contributions). Employers now are required to roll over 401(k) balances between $1,000 and $5,000 into an IRA for you. Accounts with less than $1,000 will be automatically cashed out — and fall subject to taxes and penalties. Departing employees with accounts worth more than $5,000 will have the option of leaving their money in their former employer’s 401(k) plan.

5. noodles on January 27th, 2010 at 3:57 am

   You should be able to roll it over into a new account when you get a new job or you can go ahead and take out what you have put in. There will probably be a penalty for taking it out though.

6. snouke on January 27th, 2010 at 6:32 am

   you can roll it over into an IRA.
   I suggest Vanguard.

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