Welcome! | Ask A Question

 
 
 
 
Question

Asked 12/9/2009

How long do i have to wait to close my 401k account when laid off indefinately?

I was laid off for lack of work. I was told my insurance would be cancelled Jan. 1 (6 weeks) I then asked if it was permanent and was told "I don't know what the future holds, I'm Soooo sorry. I was then escorted to my toolbox by the president of the company and told to clean out my tools. She stood there and kept both eyes glued to me to make sure I didn't steal anything. She then told my supervisor to escort me to my car. This was a company I had been with and loyal to for 4 years. Now I was being treated like a criminal. I got a strong message that I was not going to be called back. I have about $800 in a 401k. When I tried to get the money out I was told I couldn't touch it because I was not terminated. I called my H.R. and she said "We may still call you back". I was told by A.B.G that there is no time limit for them to decide whether it is permanant or not. How can this be? There must be a legal cut off point, or they could say this for the rest of my life: "We may call you back someday" I have a 9 year old son who is losing his health insurance in 2 weeks and now won't have much of a Christmas either. What does the law say? how long can they string me along legally. Even if they made it a permanant layoff, nothing is preventing them from calling me when things pick up. How can I get my money, do they have a time limit? To me and everyone I've spoken to agrees that cancelling my health insurance is a good indication that they are through with me. Am I wrong?

 
 
 
 
 
Answers

Answer 1/1 - Submitted 12/9/2009

They can string you along as long as they would like unfortunately, it isn't a great business practice, but it is legal as long as they are allowing you to collect unemployment. You are better off waiting until you have other employment and rolling it over to your new employers 401k. When a withdraw is made, there is a required amount to be withheld for federal taxes, and there most likely are penalties. Additionally, you will have to pay more taxes on it if it withdrawn or closed and not rolled over. In some states, you are required to notify the unemployment agency with the amount received, affecting the $ amount you receive temporarily. After the federal taxes, penalties and taxes due later to the state and irs you could receive as little as $300 of the $800. I know when there is a loss of income we think every penny we can locate will be helpful but I would seriously think hard and do research in my state first. You have a local state representative, ask for help or advice since that is what they are there for.
If you would like ideas on how to stretch a buck especially over the holidays, just post another question. I have been there fairly recently. I was layed off (same deal, may call you back anytime) from a job making $85,000/yr including commission, gratuities and bonus only to receive $390/week before taxes in unemployment. It can be done and it surely makes you stronger.
Good Luck

 
 
 
 
Answer This Question Now

Type your Answer in the box below and post your answer.

Learn more about how this works

 
 
 

Related Questions (Ask a New Question)

 
Can i withdraw money from my 401k or even close it?

At the beginning of the year we took out a loan on our 401k. at this point we still need more and were looking to make a withdrawal ok it. ing told us we can't withdraw but we can file for a hardship. we have already done this and were denied. we don't want to wait till we are forclosing on...

See Answers

 
Where to transfer a 401k into?

I was laid off a few months ago. i had a 401k with the company and will have to transfer it into another type of account. what are some good ideas of where to transfer my 401k? i do not have a new job and have been self employed as a freelance writer since being laid off.

See Answers

 
I have been laid off and need to withdrawal my 401k to live on, i currently have a long against it will this loan be taxed a

Laid of from my employer and would like to withdraw my 401k i realize i will pay a penalty plus have taxes withheld i have a loan against by 401k will this loand be penalized and taxed also.

See Answers

 
Related Questions

Can i withdraw money from my 401k or even close it?


At the beginning of the year we took out a loan on our 401k. at this point we still need...

 

Where to transfer a 401k into?


I was laid off a few months ago. i had a 401k with the company and will have to transfer it...

 

I have been laid off and need to withdrawal my 401k to live on, i currently have a long against it will this loan be taxed a


Laid of from my employer and would like to withdraw my 401k i realize i will pay a penalty...

 

I have a 401 k account and i just got laid off, how can i get my money out ?


I had a knee surgery that happened at work and i just got laid off and need cash. i have a...

 

How long do i wait for 401k funds at time of retirement


I am retiring at end of year and want to take my funds from my company 401k how long do i...

 

Is my husbands employer stealing his 401k?


My husband is working for a company on prevailing job wages and yes they are suppose to have...

 
 

See more 401k questions

 
 
 
 
 

Ask A Question

Ask a new question about
401k: