Coping in tough times: I lost my job. What about my 401(k)?
I’ve been laid off. What should I do about my 401(k) plan?
Your retirement is the one part of your financial picture that you can put off making decisions about right away.
That’s because many employers will allow you to leave a 401(k) account at your former workplace, if it’s above a minimum amount.
Your other options include rolling the money over to your next employer’s 401(k) plan or transferring it to an Individual Retirement Account.
The IRA’s a great choice if you can find one with low fees and plenty of diversified investment options.
You’ll have to set up the new account, then return to your old employer and fill out the paperwork to release the money. This isn’t as easy as an IRA-to-IRA rollover. But a direct transfer – without the money going through your hands – is the best way to make sure your transfer doesn’t run the risk of looking like a withdrawal to the IRS. That could cost you plenty in taxes and possible penalties.




Harriet Johnson Brackey, the personal finance columnist for the Sun Sentinel, is an award-winning business reporter. Her columns for 2008 were named "The Best in the Business," a national award chosen by her colleagues at the Society of American Business Editors and Writers.