I have a 401K question too

[tiggersmom2]

My husband had been working for his old job for 16 years and had a 401K there that he contributed the maximum to. Well, he started working for the railroad in December and he is not eligible for enrollment in the 401K there until this December. We just need to know what to do with his 401K in the meantime (if anything).

He has contacted his old job but they have not been helpful....any help would be appreciated.

 

[HayGan]

My husband had been working for his old job for 16 years and had a 401K there that he contributed the maximum to. Well, he started working for the railroad in December and he is not eligible for enrollment in the 401K there until this December. We just need to know what to do with his 401K in the meantime (if anything).

He has contacted his old job but they have not been helpful....any help would be appreciated.

If his old employer won't let him keep it in their's until he can transfer it over than you can roll it over into an IRA and then roll it over into the new 401k in December. Your bank may very well have someone who can help you with the process.

HTH

 

[chyam]

I don't know if it is different state to state but your best bet would be to contact the financial company that the 401 belongs to....mine is Fidelity, but used to be Key Corp and Putnam before that. From what I understand depending on your age you can do several different things. Leave it where it is and wait til you are retirement age, if you are over 55 I think you can roll it into another account like an IRA etc. I don't think you can roll it into the new account with the new employer but I could be wrong. Each financial holder of 401K's have different rules so I think you should start there.

 

[EsmeraldaX]

I know that you can just let it sit until he can start up his new one and then roll it over into the new one. (I hope that made sense...). I'm not sure about adding to it in the meantime though. Can you call whoever the 401K is managed by (Fidelity or whoever...mines with Fidelity and it seems like everyone around here has them also...) ? They might be able to help if his old job is not being cooperative...

 

[tiggersmom2]

Thanks so much for the quick replies!!!!! I am going to try to contact the co. the 401k is with (diversified). It is great to know that I can roll this 401k into the new one....that makes me feel better. Gosh, I hate being ignorant about things....ughhhh!!!!!

 

[Nicsmom]

I've worked in this industry for 15 years. First, every 401(k) is different, so you will have to talk to the plan administrator or your husband's human resources. Some of the options may be: to leave the balance in his current plan; roll it over to his new plan when he is eligible or in some plans even before he is eligible (call the plan administrator/HR of new plan); roll it over to a conduit IRA and then into his new plan. Things that you want to consider: fees, investment return. If you don't keep it in some kind of retirement plan or IRA, you will be subject to taxes and if you're under the age of 59 1/2, you may be subject to a 10% penalty.

 

[marlasmom]

You can roll it over into an IRA and that would be my suggestion. One of the big mutual fund companies - i.e. Schwab, Fidelity, Vanguard - would be my suggestion. While you can leave it with the former employer, I personally don't think it would be wise. By rolling it over you would have control as to how the money is invested and can change your investments as you wish or as the market goes. Furthermore, I would not want my former employer to have any control over my money.

Very important - be sure the money is transferred directly from the old 401(k) to the new IRA. In other words, don't let it come into your hands because you will trigger a tax consequence and they will deduct 20% of your principal. If you don't hold it for more than 60 days you can recover the money, but you really should not go through that hassle.

I was an ERISA (employee benefits) paralegal for quite a long time. Any questions, feel free to pm me.

Barbara