If you get fired or lose your job can you take your 401k? If so, how long for distribution?

Question

If you get fired or lose your job can you take your 401k? If so, how long for distribution?

Answer 1

You can always cash out of your 401k, but until you have reached retirement age, there will always be a penalty.  There's the early withdrawal penalty, and they'll also take out taxes (probably at a much higher rate than normal, too).

Distribution from a 401k is usually instant, except for issues like waiting for a check to be issued and mailed, and then waiting for it to clear after the deposit.  It's usually quickest to request a wire transfer, which is generally done within 48 hours.

If you can live without the cash, you're better off leaving it alone, or rolling it over into an IRA, or your 401k account with the new employer.

Answer 2

Your contributions to your 401k are always yours, no matter how or when you leave your job.  If your employed contributed to your 401k, you have to remain with the employer a certain length of time to become "vested" and be allowed to keep the money they contributed.  Once you are vested, all their contributions are yours to keep.

You can leave the money in that account for as long as you like (the company has no access to it).  You can roll it over to a IRA at a bank or financial institution, or to a new 401k when you get a new job.  Be careful about the paperwork, and make sure its a "rollover" - if you cash out before you retire, you will face stiff fees and lose most of the money to taxes.

Answer 3

You can set up a IRA Rollover account with a brokerage or a bank (prefer a brokerage).

They will help you complete forms to transfer the assets or liquidate the assets and transfer cash to the IRA Rollover account.