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Asked 11/25/2009

My employer cancelled our 401K plan and forced us to withdrawal all money. Is this legal?

The title pretty much sums up everything. The company is doing poorly and opted to terminate the 401k plan for employees. Everyone basically had all funds transferred into their individual bank accounts. Is this legal? I'm guessing everyone is going to get hit pretty hard with tax penalties. Are there other options? Thank you in advance for any advice.

 
 
 
 
 
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Answer 1/2 - Submitted 11/25/2009

You do not have to pay a tax penalty if you quickly reinvest it into an IRA. This is called a rollover and the IRA can have the same tax benefits you have with an IRA. I have done this, it is easy. Talk to a broker or banker and they can set it up for you.

 
 

Answer 2/2 - Submitted 11/25/2009

The above is correct , hopefully you didnt receive the check ,yet , in your name , it si normally sent from your employer directly to the rollover ira.

good luck

 
 
 
 
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