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If you've lost your job, or are changing jobs, you may be wondering what to do with your 401(k) plan account. It's important to understand your options.What will I be entitled to?
If you leave your job (voluntarily or involuntarily), you'll be entitled to a distribution of your vested balance.
Your vested balance always includes your own contributions (pretax, after-tax, and Roth) and
typically any investment earnings on those amounts. It also includes employer contributions (and earnings) that have satisfied your plan's vesting schedule.
In general, you must be 100% vested in your employer's contributions after 3 years of service ("cliff vesting"), or you must vest gradually, 20% per year until you're fully vested after 6 years ("graded vesting"). Plans can have faster vesting schedules, and some even have 100% immediate vesting. You'll also be 100% vested once you've reached your plan's
normal retirement age.
It's important for you to understand how your particular plan's vesting schedule works, because you'll forfeit any employer contributions that haven't vested by the time you leave your job. Your summary plan description (SPD) will spell out how the vesting
schedule for your particular plan works. If you don't have one, ask your plan administrator for it. If you're on the cusp of vesting, it may make sense to wait a bit before leaving, if you have that luxury.
To read more, feel free to download the full article attached below and we hope this helps you in your decision making. Let us know if we can be of any assistance.
Just email me at: mgreen@tgacapitalmanagement.com or call 508-224-9646
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