changing jobs, 401k question

[kneifl]

I'm changing jobs and have been off for close to 3 weeks. The last few weeks have been a lot of fun. My employer does not know I am going to call him tomorrow morning and quit. He is probably not going to like it but I don't give a fukk. I'm going to be making more money at my new job. If I were to come in mid week and tell them my last day was going to be Friday, they would have told me to pack my chit and get the fukk out of there as soon as I told them I was going to work for one of their competitors so why not take a few extra days vacation and get paid for it. Here is my question, how do I get full access to my 401k fund which has a lot of money in it. My new employer says I can roll it over to their plan but I don't want to get charged any fees what so ever.

Thanks,

kneifl

 

[Morris]

Why not leave that one there and start a new one with the new employer? That way you've got 2 working for you.

 

[SixFive]

I'm changing jobs and have been off for close to 3 weeks. The last few weeks have been a lot of fun. My employer does not know I am going to call him tomorrow morning and quit. He is probably not going to like it but I don't give a fukk. I'm going to be making more money at my new job. If I were to come in mid week and tell them my last day was going to be Friday, they would have told me to pack my chit and get the fukk out of there as soon as I told them I was going to work for one of their competitors so why not take a few extra days vacation and get paid for it. Here is my question, how do I get full access to my 401k fund which has a lot of money in it. My new employer says I can roll it over to their plan but I don't want to get charged any fees what so ever.

Thanks,

kneifl

there are others here smarter than me on these matters, but I would never roll it over into a new employers plan nor would I leave it in the old employers plan. I would fill out the paperwork and roll it into a traditional IRA with your stockbroker or whomever else handles your money, or really, you can do it yourself. You won't get charged any fees unless they charge you 50 bucks or so to do the transaction as long as you roll it into a traditional IRA. If you cash it out (I don't recommend that), you're looking at only getting a little more than half of it after the fees.

Don't you think you should give your employer 2 weeks notice or whatever it calls for you to give in your contract? Not good to burn bridges.

 

[kneifl]

Don't you think you should give your employer 2 weeks notice or whatever it calls for you to give in your contract? Not good to burn bridges.

I agree sixfive, I always like to give 2 weeks notice and always have given at least that in the past. However, the company policy (It's a bad one IMO) at my most recent employer (the one I'm leaving) is if an employee is leaving the company to go to work for a competitor is to get them to exit the building within 15 minutes (also they will lose all existing vacation time) and watch them clear their desks. I won't go through that bs with all of the friends & business assoc. I have made at that place of employment. I agree with you on the 401k, a little leary about rolling it over.

kneifl

 

[Morris]

SixFive, If you change from a 401K to a tradional IRA isn't it considered a transaction where you would be eligible for taxes and peniltys same as a cash out or sale? It's been a while since I did it I don't really remember.

 

[SixFive]

SixFive, If you change from a 401K to a tradional IRA isn't it considered a transaction where you would be eligible for taxes and peniltys same as a cash out or sale? It's been a while since I did it I don't really remember.

not if it's a traditional IRA since both it and a 401K are pre-tax money. If it is rolled into a Roth, there would be taxes at your earning rate for the whole amount.

An expert in this area will log on soon and see this to ensure this is correct. I'm pretty sure it is because I rolled over one several years ago.

 

[Morris]

SixFive thanks. I did it about 10 years ago and don't really remember. Have since retired. I have 2, one is growing one isn't.

 

[kneifl]

Why not leave that one there and start a new one with the new employer? That way you've got 2 working for you.

There's a time limit to get it out of there plan or they'll cash it out and send you a check while keeping a large amount of it for themselves.

kneifl

 

[Morris]

Kneifl, Take it and run. Didn't realize that. Good Luck on your new job!

 

[ageecee]

Kneifl,

Why dont you just work friday and after work clear out your desk and then call them Monday to tell them you aint coming in anymore..

 

[Cappin Kirk]

There's a time limit to get it out of there plan or they'll cash it out and send you a check while keeping a large amount of it for themselves.

kneifl

I don't think that is legal. They may withdraw a portion of what they have matched over the years if you aren't considered vested in the company. For example, my old job required you to be there for 3 years before you could keep the matched portion of the 401k. Whatever you put in is yours even if you leave it with them. At least that's the way I understand it.

 

[TAZ]

I can be of some help here I think. Most everyone above was correct. You can roll your 401-K into any other tax deferred account (you contributed pre tax dollars) without penalty and generally without any fees or service charges. Other tax deferred accounts would include a new employers 401-K or a traditional IRA as well as some others. It would not include a ROTH IRA since those contributions are with after tax dollars.
I am not sure about the former employer cashing you out, it is probably legal as long as they disclose it, why should they have to pay for you to have an account with them.
The best way to do this is set up a trustee to trustee transfer from old 401-K to wherever you choose, they will take care of moving the money, whenever possible do not take possesion of the money. Aside from withholding that will need to be done, if you do not roll it over within 60 days you just received 'ordinary income' for the whole amount which means put that big number on the front of your 1040 and pay the taxes on the back.:scared
Last item of interest is whether your former employer matches your contributions, if they do there is probably a vesting period on their contributions. You are always entitled to your money, but you may only get 50% of their matched contributions if you have worked there 2 years or less, 75% for 3 years, 100% for 5 years, etc.
Let me know if you have any other questions:SIB

 

[kellyindallas]

Simply talk to the appropriate person in your new job's benefit departments. She'll explain your options and the time frame within which you must do it. Rolling it over (and there are numerous places to roll it into) doesn't cost money. It's when you cash it out that it costs you.

 

[c20916]

The company is required to keep your money in there for as long as you want so long as your balance is over I think like $1,000. Any balance under that and they can cash it and send you a check. I have had my 401(K) in my previous employers plan for over 5 years.

As TAZ stated depending on your vesting schedule of matching contributions they may be able to take back some of their matches.

You can roll it over into your new employers 401(k) plan if you would like. They would likely give you a form to fill out and they will take care of the rest as far as transferring the money in from your old plan. There is no cost for doing this.

 

[saint]

I'm changing jobs and have been off for close to 3 weeks. The last few weeks have been a lot of fun. My employer does not know I am going to call him tomorrow morning and quit. He is probably not going to like it but I don't give a fukk. I'm going to be making more money at my new job. If I were to come in mid week and tell them my last day was going to be Friday, they would have told me to pack my chit and get the fukk out of there as soon as I told them I was going to work for one of their competitors so why not take a few extra days vacation and get paid for it. Here is my question, how do I get full access to my 401k fund which has a lot of money in it. My new employer says I can roll it over to their plan but I don't want to get charged any fees what so ever.

Thanks,

kneifl

kneifl-

If you are planning to roll it over to another account, DO NOT have your present company cash the check to you in order to place it in another account. In a way, it's a trap. Instead, you want to do what is called a "trustee to trustee transfer", and your old co. will directly send it to your new one (req. by law so they can't say no).

If your present employer sends you a check, you have 60 days to get it into another account. If you do this, your old employer will withdraw 20% of it for taxes. This is regardless of whether or not you roll it into a traditional or a roth. You WILL get the 20% back when you file your income tax, but before then you will have to cover the difference.

As an example, say you want to roll over 20k in a traditional 401k. There will be no tax imposed since both are pretax dollars from that angle. If you have the old co. cut you a check, you will get a check for 16k, reflecting the 4k deduction for taxes. You then have 60 days to place the entire 20k into another account, meaning you have to make up that 4k difference out of your own money until you file taxes. This tax has nothing to do with the tax taken if it's rolled into a roth, it's a tax the govt imposes.

There were a couple of great links from CNN money around new years, which is where I got this information. I will post all of them, which are directly applicable to your situation. They are a great resource IMO.

Rollovers

http://money.cnn.com/pf/101/lessons/23/page4.html

On that page, look to the right and there are a bunch of links to great 401k sites.

Also, for those interested, check out these links on this cnn money site. There is some very valuable info.

http://money.cnn.com/pf/features/tips2007/index.html

For the links, you will need to put a backspace to get the 2nd line to be one big line with the top. It made this post very wide.


Hope this is a help to everyone-

saint

 

[gjn23]

aren't traditional and roth ira's both post tax contributions????? isnt the only pre-tax contribution a 401k?

i sent a 4k check to contribute to my traditional ira.....obviously that money was already taxed thru my company payroll......thus, when converting a 401k to a traditional ira wouldnt your yearly ira contributions be post tax and the rolled over 401k dollars be pre tax?

 

[TAZ]

gjn23 - you are correct any contribution to an IRA will come from your pocket after you have paid payroll taxes. With a traditional IRA you can deduct contributions, up to $4000 subject to certain restrictions, from your ordinary income on the from page of your 1040, thereby reducing your taxable income this current year. You will eventually pay taxes on the $4000, you are just deferring it. A ROTH IRA contribution can not be deducted on your 1040 so if remains 'after tax dollars'.

 

[saint]

aren't traditional and roth ira's both post tax contributions????? isnt the only pre-tax contribution a 401k?

i sent a 4k check to contribute to my traditional ira.....obviously that money was already taxed thru my company payroll......thus, when converting a 401k to a traditional ira wouldnt your yearly ira contributions be post tax and the rolled over 401k dollars be pre tax?

yeah correct, he should transfer it from his company he's at now to the new company's 401k, with them doing it directly.

Thanks for the correction.