The first thing you should do is check with your previous employer--likely the human resources department--to hear about the plan policy directly from them.

That said, the contributions you have made to the 401k plan and any employer contributions that are vested are your property.

Generally, there are several options available to employees when they leave an employer:

Both plans are established by employers for the benefit of their employees. A 401k plan is established by corporations, while a 403b plan is established by non-profit organizations, public education organizations and self employed ministers. Both qualified retirement plans have similar tax treatment.

A 401k is a qualified retirement plan established by employers for the financial benefit of their employees. Funds are traditionally deposited by the employees on a pre-tax basis, meaning the individual contributions are made with “gross” or pre-tax dollars which reduces one’s adjusted gross income for income tax purposes.

A 401k plan is established by an employer to assist their employees to save for retirement. Funds which are contributed into the plan by the employer are typically treated on a tax-deductible basis, although some plans offer the option to contribute on an after-tax basis. The funds grow on a tax-deferred basis and are taxed only upon withdrawal. Funds withdrawn prior to the age of 59 ½ are subject to early withdrawal fees and income taxes, while funds withdrawn after the age or 59 ½ are treated as ordinary income.

The vested portion of a 401k account is the portion which is yours and which cannot be forfeited in the event that you sever employment with the organization. The money which you contribute into the plan is immediately vested, but any portion which your employer contributes on your behalf may be subject to a vesting schedule.

The 401k plan was established to encourage individuals to save for their future retirement needs.  A 401k plan is established by an employer to assist their employees to save for retirement.  Individuals who are eligible to save through a 401k plan can save money on a pre-tax basis, lowering their annual taxable earnings, and in some cases with qualified plans, can contribute additional funds on an after-tax basis. 401k plans also benefit the employer, as contributions made on behalf of the employees into these accounts may be tax-deductible for the business.

The amount of tax owed when an individual cashes out of a 401k, either early or at the age of retirement, is based on the individual’s annual income tax bracket as proceeds from an IRA are treated as income.  In other words, the person’s normal tax rate at the time of distribution is applied to the funds.  If your income tax rate is 30% and you withdraw $10,000, then you will owe $3,000 in taxes during the year of withdrawal. 

Funds withdrawn from a 401k prior to the age of 59½ or for a qualified disability are subject to a 10% IRS penalty and income taxes at the individual’s annual tax rate.

The 401k plan was first created in 1978 as part of the Tax Revenue Act, although it did not become widely used as an investment tool for many years.

Individuals who are 21 years and older with access to a 401k plan through their employer are eligible to contribute funds.