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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.

Categories: Coping in Tough Times (21)
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About the author
You've got the job of managing your money. No one in school taught you how. But you and I, we can teach each other, how to handle it, how to save for retirement, how to make money last, how to educate the kids, how to make a budget work. The conversations I have with my readers are fun. Money's important, but discussing it does not have to be boring.

Harriet Johnson Brackey 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.

Brackey has worked at Business Week magazine and at USA TODAY, where she was a founder and part of the original staff of the Money section at the country's first national newspaper. After nearly 11 years there - spent covering the 1980s bull market, the insider trading scandals, the 1987 crash - Brackey left Washington, D.C., and came to The Miami Herald. She spent the next decade writing a column about personal finance that chronicled the stock market's Internet boom and bust, as well as the popular Money Makeover features.

Brackey also has done commentaries for Marketplace Money, which airs on National Public Radio and The Nightly Business Report which is broadcast on more than 250 PBS television stations nationwide. She also has been a radio guest on WLRN’s Miami Herald News.
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