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401k cashed?

Discussion in 'BBS Hangout' started by yuantian, Dec 21, 2008.

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  1. yuantian

    yuantian Member

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    so i changed a job earlier this year. and i just checked my previous retirement plan and the transaction said, amount paid to Bancorp and cashed. so i have about 1500 forfeited which i don't mind much at all. but where the hell did my money go? i have not received any thing. am i ****ed?
     
  2. ScriboErgoSum

    ScriboErgoSum Member
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    No. If you put money in a 401(k), you're 100% vested. They have to give you that money or allow you to roll it over to another retirement plan. Some plans allow companies to give an automatic distribution on termination so they don't have to manage your account any longer.

    If the company matched or gave you profit sharing, you might not be 100% vested in that. That depends on the vesting scale your company used and how long you were there. If you're not 100% vested, you forfeit the unvested portion (example 60% on $5000 means you keep $3000 and forfeit the $2000).

    The one problem with a 401(k) distribution is you have to pay a tax penalty on it. That money is usually withheld from the distribution check and paid to the goverment directly.

    If you haven't received your check, tell them you haven't received it and they'll send it to you. You might be able to convince them to allow you roll it over, but usually once they've processed the paperwork, they don't like to undo it. Can't hurt to try though if that's what you want to do with the money.
     
  3. yuantian

    yuantian Member

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    thanks. i doubt they will roll over since it's been like half a year. they took 30% off when they cashed it. i guess i will have to pay tax penalty later or whatever. i don't mind that. i am just worried that i won't be getting the left over money which is a sizable amount. i don't recall receiving anything in the mail. i guess i just don't know how it works. they send the check of the left over amount to Bancorp Bank. do they just keep my money there without an account? i guess i will have to call them to figure out how to get the money back.
     
  4. ScriboErgoSum

    ScriboErgoSum Member
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    They might have deposited it in your name with Bancorp. Normally they just mail the check directly to the participant. That's definitely your money, so they can't stiff you on it.

    You should actually check to see if you can roll it over. If you had more than $10,000, they can't do an automatic distribution (I'll check on that figure tomorrow, I work for a TPA).

    The 30% should cover the tax hit, so you shouldn't have to pay any more.
     
  5. yuantian

    yuantian Member

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    thanks a bunch. i only worked there for about a year and half. it was about 5k and they took 1.5k for cashing it. i will see if i can still roll over. it not, not a big deal. thanks a lot. was my first job and 401k and all. :)
     
  6. ima_drummer2k

    ima_drummer2k Member

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    Sounds like you were 70% vested and they just took their 30% back.
     
  7. pirc1

    pirc1 Member

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    You should be able to roll over to IRA without penalty. I did that several years ago. I stayed with the same fund management company and kept everything the same (Vangaurd) except change from 401K to IRA.
     
  8. SwoLy-D

    SwoLy-D Member

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    I really really thought you went to the bank and took out four hundred and one thousand dollars. :eek:

    <--- knows nothing about investing.
     
  9. ScriboErgoSum

    ScriboErgoSum Member
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    Then it was an automatic distribution. Companies don't like to have to administer money of employees who have left. There are tax forms that to be filled out per participant, and usually fees with their vendor or TPA. A lot of them set up their plans to allow automatic distribution. You're probably going to have a really hard time rolling it over, especially if it's been a few months.

    The 30% is definitely your tax withholding for the distribution. You'll need to file a 1099 form with your taxes. One should be sent to you. It'll include the amount of the distribution and tax withheld (the 30%).

    Make sure all 100% of the final balance is accounted for. 401(k) is always 100% vested. So is Safe Harbor money (if your 401(k) plan does that). Rollver money is also 100% vested.

    Matching and Profit Sharing is subject to vesting rules.
     

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