Retirement question

Wile E

Well-known Member
I have a IRA-401K question for anybody that can answer this.

Regarding a 401k
I have some money at an old employer.
I left the company 15 years ago.
If the company was to go bankrupt could the
creditors go after the money in the employee
401k accounts? If you know the real answer please chime in. If yes then a 401k is not really owned by the employee if it can be raided.

NOTE: I am not talking about a company pension plan.

Thanks in advance.
 
Yep,
That is what I thought too.
If an employer could dip into that large 401k account then the amount of lawsuits by employees would be in the tens of thousands. The shysters in business would take every route to access that money to buy beach houses, fancy cars, boats, whatever.
 
Yes the money should still be there. The company really has nothing to do with it, it's with the investment company. You should have been getting statements every few months I would think.
 
Since you know longer work for the company I hope you know that you can roll it over into your own individual retirement account and invest it in thousands of choices of your choosing rather than picking from the few choices that the company allows.
 
The money is yours.

One thing to consider (with a real financial adviser) is moving your 401k over to a low cost IRA like Vanguard, Fidelity or perhaps T. Rowe Price. Sometimes company 401K's, while are profitable, there can be high maintenance fees that can eat into your earning potential.
 
Yes it is yours and should be there safe and sound. I will tell you for free, though, what I tell my paying clients. When you leave a company, roll your qualified plan over into an IRA at a brokerage of your choosing. If you feel qualified then invest it in good securities of your choosing. If you need help most of the brokerage houses will have people to help you. I am not a fan of financial planners or insurance people that offer mutual funds but cannot broker stocks. They often are selling a product as opposed to investing. Talk to people and work with someone you like. That's my position when asked, after 25 years in private practice.
 
Your own contributions to your 401k were yours when you deposited them and nobody can take them. Any employer contributions may or may not have been "vested" at the time the company chipped them in, but by now they are also yours; the laws on 401k vesting are quite strict.

If you're not comfortable with where your 401k is sitting, you can roll it over to an IRA or to the 401k at your current employer. There may be good reasons to do so, such as lower fees or better investment selections. Just be sure you follow the procedure for rollovers (which the new investment firm will help you with), if you don't do it right you'll be subject to taxes and/or penalties.
 

Don't count on anything being there. I would roll it over to an IRA.Protected by Federal Law? That may be but you will be dead and buried trying to get your money through the legal system.
 
Once the money is in your account the vested portion is yours. The company can't get access to your account anymore than they can get into your bank account. The company handling the investments is the one you need to watch. More than one employee has raided the balance of long dormant accounts that have seen 0 activity for years.
 
I lost $5000 when my old co. went BK, and the investment co. was bought out .No body knew nuthin' when I tried to get the money back. Roll it into some other kind of IRA YOU control !!
 
There is really is nothing set in stone.The one think you can be assure of is that we all are going to die some where in time .
 
Where or what is the money invested in? If some or all of it is in company shares there would be nothing left if the company went bankrupt.
 
Some places have rules about not being able to do certain things with your 401K while you are an employee there, such as rolling it someplace else. If you quit, retire, or get fired those rules are all thrown out the window. My personal advice is to roll your company 401K to a place of your choice (personal 401K, IRA, whatever) whenever there is an employee/employer seperation. I had a chance to move mine one time during employment becuase of ownership change in company, and I did so even though I could of rolled it into the new company 401K plan. You are better off having it where you want it, where you have controll of it, and invested in what you want it invested in, then if something happens you only have yourself to blame and not someplace you use to work at for going broke.
 
No, it is yours. There is a federal law that you cannot withdraw the money without penalty until you reach the age of 59 1/2. Once you reach that age you can roll it into any type of account you want. You may have to pay taxes on the the amount you withdraw, but not a penalty.

Talk to a trusted financial advisor though, dont trust a bunch of tractor nuts. :lol:

Gene (59 & 3/4)
 
The money that is in a 401k is YOUR money that was for the most part contributed to the account by YOU. Anything in addition to your own contribution would have been an employer contribution that usually takes the form of a partial matching contribution.
In most cases, when an employee leaves the company, the company prefers (and sometimes REQUIRES) the former employee to remove the money to another account. BTDT. The administrator does not want to administer an account for a non-employee.
If the company goes out of business or bankrupt, any funds in a 401k are protected from creditors by federal law. Violation of this law could cause one or more people to be making little rocks out of big rocks somewhere in Kansas (Like Leavenworth).
Tax-wise, if the money is transferred into another tax sheltered account like an IRA, no tax is due until it is withdrawn. Generally, a 401k withdrawal is only federally taxable because it is NOT tax sheltered from state and local taxes (at least in PA).

As a side note, if you wanted an answer from somebody that KNOWS, then why are you asking in a tractor forum? That will NOT be covered by your insurance!
 

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