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Asked 2/6/2011

D0 401K plans expire?

I worked at a hospital many many years ago back in 1981 which was the first job i had that offered a 401k plan and i believe this plan was very new to alot of people back then. I remember that our plan would match what the employees payed in. I had this plan for about 5 years, never cashed any amount out of it. I had a very serious accident which I was hospitalized then later was not able to return to work . My question is this, what happened to the 401k did it expire after i quit working there or what? I was just curious.

 
 
 
 
 
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Answer 1/2 - Submitted 2/6/2011

401K has no expiration, but they dont match it any longer since you left your job and your money will still receive devidend or income from your investment You can take it out and roll it over to qualified IRA account which has a variety of investments not available to 401K plan.

 
 

Answer 2/2 - Submitted 2/6/2011

401k plans don't expire and your old employer, or who ever they may have merged with, still has your money. If it was invested in the stock market at the time, which is a decision you would have made back then, it could amount to a very large amount.

Contact the HR department of your former employer to find out what you own and what it's worth. You could leave it where it is as long as you get something proving your ownership, or transfer it to an IRA and invest in something else. You could also cash it out under certain circumstances which Congress provided for, called early termination exceptions, but if you are under 59 1/2 you may face a 10 % tax penalty, but there are also exceptions allowed to avoid this tax penalty.

Once you have a handle on what you own and where, you might contact one of the large mutual fund companies. They can provide free advise and details on the ins and outs of transferring or cashing out your 401K. If you want to transfer it to an IRA you will want the former employer to send it directly to the new plan, otherwise you can suffer the wrath of the IRS. When calling a mutual fund company start by saying, " I'm thinking of opening an account..." They will give you all kinds of free advise.

 
 
 
 
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