At Retirement
Federal law sets a mandatory date by which you must start receiving your retirement benefits, even if you would like to wait longer. This mandatory start date generally is set to begin on April 1 following the calendar year in which you turn 70½ or, if later, when you retire. However, your plan may require you to begin receiving distributions even if you have not retired by age 70½. Please refer to your summary plan description or contact your Plan Administrator for details.
Termination of Employment
If you leave your employer before retirement age, there are a few options for you to transfer your vested account balance out of your employer’s plan:
- A rollover to another retirement plan
- A rollover to individual retirement account (IRA)
- A lump sum (you may owe a tax penalty and/or be required to pay income taxes)
If you have separated from service and would like to request a distribution, please complete the appropriate form and forward it to your Plan Administrator:
- Ascensus
- Fidelity
- Hartford
- John Hancock
- Newport Group
Distributions with Account Balance Less than $5,000
If your account balance is less than $5,000 when you leave the employer, the plan may make an immediate cash distribution without your consent (refer to the summary plan description of your plan). If this distribution is more than $1,000, the plan must automatically roll the funds into an IRA it selects. Please note that the distribution will only occur if the plan administrator does not receive the distribution form by the cut-off date (check with your Plan Administrator).
Self-Directed Rollovers
In the event you would like to handle the rollover out of your plan, we have engaged with a national firm who assists in a proactive manner to facilitate rollovers. The links to Fidelity and Vanguard are below.
Both of these companies have streamlined the rollover process and will hold your hand during this process. We, too, are able to assist in a proactive manner and believe strongly that this is one of the value adds that we offer to our clients.
[button title=”Fidelity Rollover” url=”https://www.fidelity.com/ira/401k-rollover” color=”magenta”]
[button title=”Vanguard Rollover” url=”https://personal.vanguard.com/us/whatweoffer/rollover” color=”magenta”]
Hardships
401(k) plans are permitted to – but not required to – provide distributions in case of hardship. Refer to your summary plan description or contact your Plan Administrator to see if it does permit them and what circumstances are included as hardships.
Loans
401(k) plans are permitted to – but not required to – offer loans to participants. The loans must charge a reasonable rate of interest and be adequately secured. The plan must include a procedure for applying for the loans and the plan’s policy for granting them. Please refer to your summary plan description or contact your Plan Administrator for more information.