Hi Tiffany! 401(k) plans have lots of rules and guidelines, so hopefully this will help some. I'm unclear on how you cancelled your plan, so I will make a couple of guesses. If you stopped contributing through your employer, and are still employed, your money still belongs to you. You would have to make a formal request for a distribution (that's the term your plan would use) if you want to access the funds. Remember that if you are younger than 59 1/2, not only will you be taxed on the funds you take out, but also you will receive a 10% penalty unless it is a hardship withdrawal. Be careful or this is a very expensive move.
If you have left your employer and want to transfer the funds into a Rollover IRA, you would need to complete paperwork from your plan to do so. If you do a direct transfer from your 401(k) into a Rollover IRA, you would not be taxed and there are no penalties.
If you are unsure what to do, I recommend consulting with a fee-only planner who can help you determine the best options given your situation.
I am not sure by your question if you've stopped working at the company which 401(k) you are referring to or not, but I'm going to assume you aren't there anymore. If that's the case, most companies don't automatically send you the balance of your 401(k) unless it's been 90 days and you have less than $5,000 in the account. I would recommend you either keep the funds in your 401(k) or roll it into an IRA unless you are retired or need the funds for something (hopefully not).
Hope that helps, Nick
A 401K is a very effective way to save money. So the questions are why are you cancelling it, how old are you, and do you need the money.
If you are still with your company, you can stop your current contributions, but any withdrawals you take will be taxed and if you are under age 59 1/2, lump sum withdrawals will be subject to a 10% penalty. This is a very expensive way to get your money. My suggestion in this case would be to leave the money in the plan but stop contributing if you really don't have the money.
If you left your company and the amount in the plan is less than $5000, then depending on the plan, they might just send you a check. This is taxable and the 10% penalty applies. You can roll the money into an IRA to avoid the taxes and the penalty.
If you are over the age of 55, then you can actually take your money out of the 401k and the penalty will be waived under an early retirement exception.
There are some other exceptions as well including one for substantially equal periodic payments which you can use and maybe some other ones that you could be eligible for.
Note that you can roll one 401K plan into another if you have a new employer. You can also roll your 401K into an IRA, but this may or may not be a good thing, depending on your situation. You lose some distribution rights by rolling the 401K into an IRA and IRAs are not as uniformly protected against lawsuits and creditors as 401Ks are.
Your best bet is to talk to a financial advisor. This advisor does not need to be fee-only, but ask him or her how they get paid.
Great question! Even thought you cancel your contributions, your not allowed to withdrawal the money from the 401(k) unless you meet IRS requirements like termination of employment. That's to make sure the money stays in the plan available for your retirement.
Some plans do allow you to take out a loan, but that must be paid back.
Hope this helps.