My costly oversight-any advice appreciated

[nairv]

I am just feeling sick right now. I mean, who isn't, the economy being what it is and all. People are losing money left and right and have no control over it. But I just threw away a whole lot of money because of sheer carelessness.
I have been with my employer for about 3 years. Or so I thought. My husband got a great new job in a new city and so I resigned effective June 30th. What I didn't realize was that if I didn't stay EXACTLY 3 years, I would lose my entire 401a. I was 6 weeks short. And didn't realize it until after I left and got the notice in the mail. We could have easily negotiated with my husband's new employment for the sake of 6 weeks.
So now, all I have in retirement is my measly contributions. The large chunk that my employer contributed is gone-around 25K.
I am trying to get a hold of the retirement specialist there to see if anything can be done, since I was so close to being vested. I have yet to get a hold of the right person.
Well, I learned a hard lesson today. I need to be paying attention to my finances. And I am really dumb when it comes to future investments. My question is, where do I go for good solid advice on saving for the future?
How do I start once again building up my retirement savings? Any advice at all would be appreciated.
Thanks BB friends.

 

[wnissen]

That is really rough. I am sorry to hear about the consequences of that mistake. The vesting period often means that the most vulnerable, those whose circumstances prevent them from keep a job for a long period of time, get nothing for retirement. If you're very, very lucky, you might be able to negotiate something, but the employer has a big incentive to say no. Offer to work from home or to buy service credit, maybe they will take pity on you. Or see if you can rescind the resignation and stay behind.

As far as building up retirement savings under your control, there are a lot of good resources. Probably the biggest single thing you can do is set up automatic deposits into a 401(k) or IRA out of every paycheck. As they say, pay yourself first. If it's at all possible, start at 10%, but anything is better than nothing.

 

[QVCshopper]

I had to stay at my company for 7 years to get 100% of their 401k contributions. I had a whole spreadsheet of my timeline there, calculating when I no longer owed my graduate school, when I was fully vested, how much bonus percentage I got every year. It was very helpful with family planning. I literally planned when to have my kids to maximize the money I had earned.

I would start a Roth IRA if you don't have one yet. I would also make sure I contribute up to (if not more than) your new company's match in the 401k.

OP, sorry this has happened. If you're lucky, maybe they will negotiate, but they really don't have to. Good luck!

 

[Halle]

Oh my GOSH!!! I feel so sorry for you. Unfortunately, I think that your former employer is unable to give you the $$$ even if he wanted to...legal issues not to mention that it would set a new precedent. I hope your DH loves his new job and that you and your family love your new home.

 

[lulubelle6188]

This happened to my DH kinda. You had to work at the company he was working at 2 years to be fully vested. He got laid off 2 weeks before his two years! It wasn't a ton of money but definetly enough to upset me.We didn't get anything. Good luck to you.

 

[ancestry]

Wow! So sorry about this.

Unfortunately I think you are going to be out of luck. I don't think that the employer can do anything about it due to federal regulations.

 

[2kidsForMe]

I am so sorry to hear about your situation. My husband did something similar with a company he left. He changed jobs right before his stock vested. About 2 years later the company sold, and we found out about all of the money we lost-enough to pay off the house, send the kids to college, and set us up well for retirement. It made us sick. I feel your pain.

 

[Swan4Me]

Since the economy tanked-DH's employer no longer contributes any $$ to his 401k or the Cafeteria plan plus his expenses have been cut.Its a tough world out there.

 

[Deealee]

I'm so sorry for you. I did the same thing at a previous job and left a lot of money on the table. I would say try to go back to work for them if it allows you to get your money back. Otherwise just live & learn.

 

[thevidas]

Nairv - Look at your SPD (Summary of Plan Description). This is a document that your employer is required to give you (you probably recieved it when you were hired) that details the Plan provisions. It will tell you how vesting is calculated (on a plan year or anniversary year basis). It will also tell you how many hours you have to work to be credited with a year of service for vesting. (Generally 1,000). It's worth doing a little research and not just taking their word for it.

 

[Shelly F - Ohio]

I know this might be a long shot but is there anyway you could go back to work for this company. Even it if meant living with family or friends for the short term that you would be there. Its worth a shot to recover your loss dont you think?
On the other hand at least it was 3 years of savings you are losing and not 7 or 10 years. So if you are aggressive in saving you should be able to recover most of what you lost.

 

[brekin67]

I did the same thing. I had to stay at my former state job until June 3rd to be vested. I was also told by HR that the date was correct. DH moved a month before me and I stayed to finish out my service. Upon resigning, I found I was not vested because I had taken 2 months off while on workman's comp (unpaid leave.) I lost my vestment and had to transfer for 401k to Edward Jones. I am not back with the state part time, and when I go full time, I will be able to be vested after I work the 2 months.

 

[nairv]

Thank you, BB friends, for the support and good advice.
I finally got hold of the retirement specialist(I probably should have had a conversation with her a long time ago) and she said the only option for me is to come back and work for them within the next 5 years. She said this is a common occurrence and people have missed being vested by days due to miscalculations.
This is just not an option right now, but since I do have a 5 year period, who knows? At least it's not totally hopeless.
Right now I am counting my blessings and have made a vow to myself to pay attention to my finances from now on.
What makes it hard is that we are so frugal as it is, especially me-shopping sales, coupons, not eating out etc and it's so difficult to fathom that that money was literally thrown away. DH is understandably upset with me and it has not been pleasant around here the past couple of days.
We both have good paying jobs in our new place and hopefully with some smart planning we can make up that amount in a reasonable time frame.
I guess this is how you learn lessons in life!
Thanks friends once again for the support. It is much appreciated.

 

[msmayor]

Considering you've left $25k on the table, I don't quite understand your not jumping at the chance to return for six weeks right now.

While true that you 'may' have up to five years, you are losing the power of compounding by foregoing that $25k now.

I realize you said "new city" in your first post. No family back in your old town where you could stay to finish out the six weeks? No friends?

Yes, its six weeks of separation and inconvenience. But its ONLY six weeks. Do it now...get it done and over with before something else in life pushes this further on the back burner.

 

[ancestry]

Considering you've left $25k on the table, I don't quite understand your not jumping at the chance to return for six weeks right now.

While I agree in theory how do any of us know that her employer would rehire her or take her back for only six weeks just so she could meet the vested time? I don't know too many employers that would be willing to do this. What is the advantage to the employer to take someone back for six weeks? Most employers would tell you go to pound sand if you tried to pull this -- "Oh I'm sorry Mr. Smith, can I please come back to work for you for only six weeks so I can take $25K out of your pocket because I screwed up? " Realistically I don't know an employer on the face of the planet who would agree to such a thing especially considering they have probably already found a replacement for the employee who left.

 

[nairv]

msmayor, I appreciate your good thoughts. But ancestry is right, there is no way they would take me back right now, let alone for 6 weeks. And life is mosre complicated now with 2 small kids who have just started school in our new place and my DH who has just started his new job.
But 5 years is a decent time frame. I may consider this next year. They still may not take me back. But one can hope.
Thanks all

 

[msmayor]

While I agree in theory how do any of us know that her employer would rehire her or take her back for only six weeks just so she could meet the vested time? I don't know too many employers that would be willing to do this. What is the advantage to the employer to take someone back for six weeks? Most employers would tell you go to pound sand if you tried to pull this -- "Oh I'm sorry Mr. Smith, can I please come back to work for you for only six weeks so I can take $25K out of your pocket because I screwed up? " Realistically I don't know an employer on the face of the planet who would agree to such a thing especially considering they have probably already found a replacement for the employee who left.

Not so sure about that...had a very dear friend who quit a job over extreme stress as he believed the job was causing his health problems. Turns out he had an incurable debilitating muscular condition and could NOT work ever again.

His employer agreed to let him rescind his resignation so he could collect short and long term disability until his Medicaid and Social Security disability benefits kicked in. This affected the employer's bottom line, but they did it out of compassion and understanding.

As for her taking $25k out of the employer's pocket...its already out of the pocket. It was probably placed in her account already, just not vested yet. The employer already charged those matching funds out to expense.

I'm sorry to the OP that its not possible to make it work. Good luck to you.

 

[canopynut66]

I am just feeling sick right now. I mean, who isn't, the economy being what it is and all. People are losing money left and right and have no control over it. But I just threw away a whole lot of money because of sheer carelessness.
I have been with my employer for about 3 years. Or so I thought. My husband got a great new job in a new city and so I resigned effective June 30th. What I didn't realize was that if I didn't stay EXACTLY 3 years, I would lose my entire 401a. I was 6 weeks short. And didn't realize it until after I left and got the notice in the mail. We could have easily negotiated with my husband's new employment for the sake of 6 weeks.
So now, all I have in retirement is my measly contributions. The large chunk that my employer contributed is gone-around 25K.
I am trying to get a hold of the retirement specialist there to see if anything can be done, since I was so close to being vested. I have yet to get a hold of the right person.
Well, I learned a hard lesson today. I need to be paying attention to my finances. And I am really dumb when it comes to future investments. My question is, where do I go for good solid advice on saving for the future?
How do I start once again building up my retirement savings? Any advice at all would be appreciated.
Thanks BB friends.

Need to see a 401 K financial lawyer as they cannot keep your contributions...that was your money. they can "possibly" keep employers contribution. but not a lawyer so not sure on that one..but would not mess with it and call a 401 specilist on this one or even have your bank branch suggest someone to look that over. You could have rolled it over and not had to pay the taxes on it as well. also ask if this considered a loss when you file your taxes.......

 

[DawnM]

Does this company have an office in your new location?

DH has somewhat of a similar situation.....through no fault of his own. He worked for an Accounting firm where his particular office was cut and so his office went and started their own firm. He went with them.

According to the retirement, you aren't vested with Company #1 until you have been there 5 years. He was only there 3.

Now, they have told him that he has the option to work for them again and finish up his 5 years at any time during his life, which at this point isn't worth it because he loves the company he is with, but you never know what may happen in the future.

Dawn

 

[rigs32]

Need to see a 401 K financial lawyer as they cannot keep your contributions...that was your money. they can "possibly" keep employers contribution. but not a lawyer so not sure on that one..but would not mess with it and call a 401 specilist on this one or even have your bank branch suggest someone to look that over. You could have rolled it over and not had to pay the taxes on it as well. also ask if this considered a loss when you file your taxes.......

You misread the OP. She got her contributions back but lost the employer match. She is NOT entitled to that if she didn't meet the requirements.

I work for the county and we have a pension system. You vest after 5 years. I am always shocked by people who leave just shy of 5 years. Most of the time it's not for a time sensitive reason other than personal desire. The financial planner in my head can't understand giving up extra guaranteed money at retirement over a month or three.