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Profit sharing, how long to receive monies?

Jan 22, 2014 by THOMAS from Rochester, WA in  |  Flag
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Hello Thomas,

William is right, we need more information to help. But I will assume that you are referring to an employer profit-sharing contribution into your 401(k) account. If this is the case your first step is to get a copy of the plan’s Summary Plan Description document. There are two sections you will want to reference. First find the section most likely called “Profit-Sharing Contribution”. Go to the sub section that refers to Vesting. The vesting schedule indicates how long you need to work for your employer before you are fully vested in your employer's profit-sharing contribution. Until you are fully vested any unvested amounts are not yours and will be forfeited when you leave your employer. Vesting schedules can range anywhere from immediate vesting to six years of service before you become 100% vested in your employer's contribution. Second, find the section most likely entitled “Distribution of Benefits”. Here you will learn how you can take a distribution from your plan. If you still work for the employer it is likely you will have to reach a certain age, called an in service age, before you are allowed to take any distribution from your 401(k) plan.

Having said this I would encourage you not to take a distribution from your 401(k) account unless you are in retirement. After all, a retirement plan is just that. A plan for your retirement. If you need the money while you are working try to imagine where the funds will come from when you are retired and no longer working and generating an income. It is usually best to leave retirement accounts alone until you reach your retirement age.

Hope this helps.

Comment   |  Flag   |  Jan 23, 2014 from Woodbridge, VA

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Thomas - you have not provided enough information to get a valid answer to your question.

Comment   |  Flag   |  Jan 23, 2014 from Canton, GA

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