What happens to the money I have put into my 401k if I no longer work for the company?

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:

  1. You can move the funds into a rollover individual retirement account (IRA).  This transfer should be able to occur without any penalties or taxes.  You would need to find a custodian for the rollover IRA.  Many financial institutions such as Vanguard, Fidelity, Schwab, etc can serve as a custodian and offer rollover IRAs.
  2. If you have accepted a new job and changed employers, you should be able to transfer the funds into the new 401k plan if it exists.
  3. You should be able to leave the funds in your previous employer's 401K plan for a certain period of time.  Check with your previous employer on this.
  4. A non-qualified distribution: You can receive the funds from the plan without putting those funds into a rollover IRA or a new 401k plan.  There are taxes and penalties, however, associated with a non-qualified distribution.


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