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About Louis Schwarz, QFP, CFP®, RFC®. ChFEBC
Expertise
Over 36 years experience - discretionary investment management, advisory service, stocks, bonds, mutual funds, annuities, IRA, Roth, 403(b), 401k, tax planning, tax preparation, retirement planning, tax reduction, life insurances. I hold five professional designations: QFP, CFP, RFC, ChFEBC, and Paladin Registered Advisor with a professional rating of five stars.
Experience
First deaf Certified Financial Planner licensee (http://www.cfpboard.org/), General Securities Registered Representative (Series 7), Registered Financial Consultant (http://www.iarfc.org/), Registered Investment Advisor, Qualified Financial Planner (http://www.iaqfp.org/), Admitted to Paladin Registry of Personal Financial Advisors (http://www.paladinregistry.com/); Chartered Federal Employee Benefits Consultant (http://www.chfebc.com/); Licensed Life, Health, & Disability Agent
Organizations
Financial Planning Association, International Association of Registered Financial Consultants, National Association of Deaf, Alexander G. Bell Association of the Deaf, National Deaf Business Institute
Publications
Deafnewspaper.com, Deaf Digest, Deaf Nation, Newswaves, Silent News
Education/Credentials
Gallaudet University, College for Financial Planning
Awards and Honors
Who's Who in Finance and Industry, Who's Who in the World, NAD Flying Fingers Award, MDAD Distinguished Award, MCAD Business of Year, Montgomery (MD) County Business Award, 2007 Outstanding Business Person of the Year, Gallaudet University Department of Business
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You are here: Experts > People/Relationships > Retirement Planning > Personal Investment & Financial Planning Q`s > 401k
Expert: Louis Schwarz, QFP, CFP®, RFC®. ChFEBC
Date: 7/7/2008
Subject: 401k
Question
Hi,
I have a question, if you are laid off from your job, can you access your 401k like take it out of the plan and put it elsewhere??during the layoff time
Answer
Hello Sharon
It is up to each employer's policy - if your job is terminated, you can transfer to your traditional IRA or other 401K with new employer. However, if you are laid off, you cannot take it out of the plan unless the employer signs the form to allow it.
One of these events must occur before you are allowed to take a withdrawl out of a 401(k) com: a layoff, illness, disability, retirement, death, or severance from employment. For more information on the particulars of your plan, refer to your copy of the "Summary Plan Description (SPD)" that you should have received when you enrolled in the plan. If you don't have an SPD request a copy from your personnel department.
My suggestion is that, When you get laid off or quit your job just leave your 401(k) alone. The company handling the 401k will send you a quarterly report and you need not do anything with the 401k til you get settled and can think about what you want to do.
Do not cash it in --- don't take the pay-out option!!! You have other choices - leave it where it is in your then former employer's plan, roll it over to an IRA, or specifically request a "conduit IRA" at the time of the IRA roll-over which gives you the option of moving that particular money to a new 401K plan in the future if you want to. I also recommend that you avoid taking out any loans on that money because you will be expected to pay it all back immediately at the time your employment ends which is when you can least afford it; the other alternative would be to take a huge tax hit.
Your employee contributions are always yours and can go with you when you leave your company. Your employer's contributions, however, may not be yours to take with you. Some employers give you ownership, called vesting, of their contributions immediately. Others phase in your ownership to their contributions over several years. Special circumstances such as death, disability or the plan's termination usually give you 100% vesting at the time of the event. So, your plans' vesting schedule will determine how much of your employer's contributions you can take with you when you leave that employer.
Regards,
LJS
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