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I am no longer employed with a company. I am wanting to withdraw the money I put in my 401k plan and want to know how?

Feb 05, 2015 by kelli in  |  Flag
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You should set up an IRA rollover account at a discount brokerage firm (Schwab, Fidelity) or mutual fund company (Vanguard). If you are planning to self-direct your investments, I recommend that you use Vanguard (mutual fund not brokerage side). Then contact the 401k plan administrator and request a rollover form. The HR department of the company should be able to provide you with an appropriate contact. Unfortunately, 401k rollovers typically must be initiated through the plan, not the receiving custodian.

If you don't feel comfortable managing the account yourself, consider contacting a fee-only advisor to help you develop and implement an investment strategy. One key point ~ if you are planning to work with an advisor, wait to transfer the 401k assets because the advisor more than likely will have a custodian that they prefer to work with. For example, my firm works with Schwab but other advisors work with Fidelity, TD Ameritrade, and a number of other custodial firms.

Comment   |  Flag   |  Feb 05, 2015 from San Francisco, CA

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First I want to state that I agree with James. These assets are for your future and should be left invested over the long term and allocated towards your retirement. But if you want to take a distribution from your plan, the process is fairly easy. First contact your plan's recordkeeper and request a distribution from the plan. If you plan to rollover the funds to an IRA or your new employer's 401(k), you'll need instructions from your new employer on where and how to make the funds payable. You'll need to make a formal election of your decision so your former employer understands your intentions with the money (i.e., cash out or rollover). Once you complete the necessary forms (online or in paper form), th rest of the process should be fairly quick. Remember that if you decide to take a cash distribution, 20% will likely be withheld for taxes and your final tax burden will be determined on your year end tax filing.

GOOD LUCK!

Comment   |  Flag   |  Feb 05, 2015 from Houston, TX

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Kelli,

Let's keep this simple. Just call your former employer's HR department. Tell them you're a former employee who wants to take the money in your 401K. Everything that you contributed via payroll deduction is 100% vested while depending on the plan and how long you worked, any matching contributions or profit share contributions may or may not be yours to withdraw. They will send you lots of paperwork including a review of what your options are and the risks associated with any of those choices (distribution by check vs. rollover to new account etc.).

Comment   |  Flag   |  Feb 06, 2015 from Fort Washington, PA

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