Hello everyone. I am new to this board and wasn't certain if this question is appropriate for this section, so I apologize if I should have placed this somewhere else.

I am 29 years old, and my company was recently bought out of bankruptcy by another company. Our (the employees) 401K savings were "frozen" until now. So, I decided to rollover my 401K savings from the old company into the new company's 401K program. Yesterday, I received a check in the mail that is pay "to the order of" John Hancock FBO: my name. No taxes were withheld because I was just rolling over the money from my old 401K to the new 401K.

Recently, the heating and air conditining system has broken in our home. We live in the south and have an 8 month old, so with spring/summer fast approaching, we really need to replace our air conditioning system. An estimate we got last month was about $5000 for a new system. My husband recently lost his job, so getting a loan right now is probably not an option. I am going somewhere with all of this...

I am thinking that taking the money from my 401K may be the only way to afford this new heating/air conditioning system. I know there are taxes and penalties that apply and that this is only advisable as a "last resort." The check I received is made payable to John Hancock FBO: my name, so I don't think I can cash this check myself? Does anyone know if there is a way for me to call my old plan (BB&T) to request a new check made payable to me?

Thank you for any advice you can offer. Sorry for the long post.

Hello everyone. I am new to this board and wasn't certain if this question is appropriate for this section, so I apologize if I should have placed this somewhere else.

I am 29 years old, and my company was recently bought out of bankruptcy by another company. Our (the employees) 401K savings were "frozen" until now. So, I decided to rollover my 401K savings from the old company into the new company's 401K program. Yesterday, I received a check in the mail that is pay "to the order of" John Hancock FBO: my name. No taxes were withheld b/c I was just rolling over the money from my old 401K to the new 401K.

Recently, the heating and air conditining system has broken in our home. We live in the south and have an 8 month old, so with spring/summer fast approaching, we really need to replace our air conditioning system. An estimate we got last month was about $5000 for a new system. My husband recently lost his job, so getting a loan right now is probably not an option. I am going somewhere with all of this...

I am thinking that taking the money from my 401K may be the only way to afford this new heating/air conditioning system. I know there are taxes and penalties that apply and that this is only advisable as a "last resort." The check I received is made payable to John Hancock FBO: my name, so I don't think I can cash this check myself? Does anyone know if there is a way for me to call my old plan (BB&T) to request a new check made payable to me?

Thank you for any advice you can offer. Sorry for the long post.
You should be able to cash the check by yourself. But, you may want to keep in mind that you can always roll the money over into the new 401k and request a loan from the same money. I did this once... you can borrow up to 50% of the total and pay the money back, to yourself, through your payroll deductions this way you can avoid paying penalties and giving 35% of YOUR money to auncle Sam. Just a suggestion. You can expedite the process as well.

Thank you jterryva! I appreciate your response. I would love to be able to do the loan from my 401K, but unfortunately, my new company's program doesn't offer 401K loans. So, the only other thing I could think of was just to do a withdraw and accept the penalty. So, I can just take this check to my back and cash it even though it is made payable to John Hancock FOB: my name? Do I need to let anyone know that I'm doing this now, or just wait until 2007 tax time to report it? I don't want to do anything illegal. Thank you again!

You can just go to the bank and cash the check. You'll get a statement before 2007 for your taxes. If you have a good accountant, you should be okay with the 10% early penalty as long as you have assets. Good luck!