What happens after you're laid off?
It's one of a heap of financial worries that come with a layoff : What happens to the money in your company-sponsored retirement plan?
It's one of a heap of financial worries that come with a layoff : What happens to the money in your company-sponsored retirement plan?
If you have less than $1,000 in your 401(k) or pension account, the company can hand the money over to you. Unless you notify them of your preference within 60 days, it can write you a check or roll the money over into an IRA under your name.
Date singles in your area now
Free sporting goods
Valentine's Day love poems contest - Win $2,500
For amounts between $1,000 and $5,000, the company can roll the money over into an IRA, but cannot make a cash distribution without your consent.
For 401(k) accounts valued at $5,000 or more, the company can't touch the money without your consent. The money stays in place unless you request otherwise.
For pensions worth more than $5,000, some companies may pay lump sums. Otherwise, you'll start getting payments when you reach the plan's retirement age, usually around 65, said Dallas Salisbury, president of the Employee Benefit Research Institute.
BARGAIN HUNTERS
Get great deals on electronics, appliances and health and beauty items.
• Simple Shopping
• Fast Delivery
• Great Savings
Start shopping now.
If you're not getting payments until retirement age, it's important to keep former employers up-to-date on address changes. Companies are required to file pension records with the Social Security administration, but it's still possible your contact information may be lost, Salisbury said.
If you cash out a 401(k) or pension, it's subject to income taxes and a 10 percent penalty if you're not yet 59 ½. So it's to your advantage to roll the money over into another retirement account, such as an IRA.
America’s Most Popular Marriage Counselling Directory
Are you a marriage counsellor? List your practice in America’s most popular marriage counselling directory Visit: www.lovesourceonline.com/counseling-directory
If you find a new job, some companies let workers roll over money from past retirement accounts into current 401(k) accounts.
— The Associated Press
