You need to pay attention to where you money is at.  If a company decides to merge with another, or goes into bankruptcy, or just decides that they want to legally protect themselves, your 401(k) plan can become hostage of an audit. 

Although an audit is meant to protect the employees of a 401(k) plan, the period that it can take for the audit to be completed can last up to 3 years.  This means up to 3 years of not being able to access your money – even if you are at risk of losing your house or not being able to feed your family.

I have seen this happen to clients.  Money they left at their previous employers gets frozen and they are left with no access to their funds.  However, if they had rolled their 401(k) to an IRA, this wouldn’t have happened.  So, if you have 401(k) plans that have been left at your previous employer, or if you are 59 ½ and still working (most employers allow in-service withdrawals), the good news is you can take control of your money and make sure this doesn’t happen to you by rolling your assets into an IRA.  If your company is at risk of bankruptcy, this is more important than ever. 

Still not going to roll your money to an IRA?  That is ok; just don’t say I didn’t warn you!

Archived Articles

• September  2009
• August  2009
• July  2009
• June  2009
• May  2009
• April  2009
• March  2009