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SheStepsUp · Mar 8, 2008, 10:50 PM

My house mate was recently diagnosed with terminal lung cancer. He has about 6 -12 months to live. Still officially employed by Sears, he is not working and receives California unemployment insurance benefits.

He has a 401k worth approx. 4k and is having a difficult time finding out why he cannot get all of his money out. He asked to be transferred to a supervisor and was told by the phone agent that she couldn't do that. He can no longer access his 401k account online, from home or from a store terminal. He needs it to tie up his financial ends and enjoy what time is left to him.

Sears Holding Co. Inc. has the account and tells him he cannot have more that $350. The rest is held for his beneficiaries! I believe an SSI app is in the works, but that takes time that he does not have.

We're hoping someone here can tell how he can get all of his money out while he is still alive.

Now to go ask why his credit cards cut him off.

Wildsporty · Mar 9, 2008, 07:49 AM

He may not be able to get all his funds out, but he should be able to get a hardship withdrawal to tide him over a little until SS kicks in. Have him write a written letter notarized by a notary to the company requesting a hardship withdrawal from his 401K funds due to extreme medical expenses.

His credit cards no longer carry him because he no longer has a job.

Shirley

He could also request to have it rolled over to a personal IRA at a bank where it would be more readily accessible with the computer and the bank. That way Sears would no longer have control of his 401k funds. If he does this he would work with the bank instead of sears. He would need to go down and talk to a local bank about this and they more than likely could do all the paperwork for him to have it rolled over.

Shirley

SheStepsUp · Mar 9, 2008, 03:11 PM

Thank you, Shirley. That's a good idea and I will give it to him. I can't believe how systems relied on suddenly turn on you when you become terminally ill. It seems so unfair that such a big percentage of the time one has left is spent doing homework and trying to barge through quickly locked doors. All while suffering through the effects of treatments. But then there are folks like you who help and we count our blessings! Many thanks and blessings to you!

Wildsporty · Mar 10, 2008, 06:02 AM

You are welcome. Not all HR people are hard to deal with, but larger corporations tend to become cumbersome to work with.

Shirley

ScottGem · Mar 10, 2008, 06:11 AM

The problem here may be the terms of the plan. Not all plans allow in service withdrawals. Also, there may be an issue of vesting. So you would need to review the plan rules to see if he can get an early withdrawal. Once he is declared disabled, then he should be able to get the money out of the 401K.

By the way, if he's collecting unemployment, then he's no longer officially employed by anyone. I suspect the reason he can't access the account is because his employee privileges have been revoked.

SheStepsUp · Mar 11, 2008, 10:45 PM

Thanks Scott. I'm not sure if he's getting unemployment or if it's state disability payments, but he is still officially employed to keep his medical benefits. At least that much is going his way. The vesting thing occurred to me, too. I'm trying to get him info without getting into his business too much.

Love the cut-to-the-chase answers here. Spent a lot of surfing time 'til I found this site.

Wildsporty · Mar 12, 2008, 06:26 AM

There are a few sites like this on the web. This is a different one than some I am used to . I have a hard time navigating at times. It does a great service for people, however, It is a little less organized and a lot less formal than other sites for which I answer questions.

Shirley