401(K ) Plan Termination
If the taxpayer’s company terminates their 401K plan, can the taxpayer cash the amount in his plan without penalties or does she need to roll it over to IRA, etc.? The taxpayer is in his thirties.
If the taxpayer’s company terminates their 401K plan, can the taxpayer cash the amount in his plan without penalties or does she need to roll it over to IRA, etc.? The taxpayer is in his thirties.
Permalink Submitted by Alan - IRA critic on Tue, 2019-05-21 00:05
If the plan requires a distribution of the balance, it can be directly rolled over to an IRA to avoid taxation, but if a check is made out to the taxpayer it will be taxable and subject to penalty unless the taxpayer completes a 60 day rollover and replaces the amount withheld from the distribution.