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401K Cash Out
Hello I am 25 years old and I left my job in May 2007. I have about $7000 in my 401k, I have just moved to another state and have been unable to obtain employment. I need this money desperatly, however I was told by my plan administrator that I can not cash out until August of 2008. Is this legal? Is there any way to get the money, I have two kids and can not get any financial assistance because I have 401k money sitting there. PLEASE HELP ME.
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I've never heard of anything like this - it seems to be a provision in your plan. Ask the plan administrator to cite the section in your plan's documents that don't allow you to access your money for a year. I'm wondering if perhaps the investment is in some instrument that has restrictions on frequency of trading?
Also ask if there is any restriction on rolling the money to an IRA. Perhaps you could roll the $7K to an IRA, and then take a distribution from there. An advantage of this would be if you are paying your own medical insurance, or have medical expenses > 7.5% of your income, at least some of the distribution would not be subject to the 10% penalty if it's distributed from an IRA. |
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