Waiting for 401k cash out

[kmac6143]

What is the name of your state? OR

I quit my job on 3/4/08 and was told it would take about a week to get my 401k money. I called on the 14th and was told the paperwork has not been made out yet. I have bills to pay and I'm worried about my credit rating. Is there a time limit for employers? I know this plan has no waiting period.

 

[cbg]

When you say, the paperwork has not been filled out yet, do you mean, they have not yet sent you the paperwork to complete, or, you have completed the paperwork and returned it but they have not yet processed it?

 

[kmac6143]

I have not gotten any paperwork at all.

 

[cbg]

Under no circumstances whatsoever can they release your 401k money on the basis of a phone call. They MUST have a WRITTEN direction from you and it MUST be on the appropriate forms. There are very, very strict laws regarding 401k disbursals and you MUST be given notice of what penalties exist. For example, if you have them cash it out to you, you must pay both state and Federal taxes AND a penalty. If you roll it over into another qualified plan or IRA, there is no tax and no penalty. They CANNOT release it without your signed acknowledgement that you understand the potential consequences of your selection.

There is no across the board law dictating how long they have to get the paperwork to you. Since it's been a couple of weeks, call them and ask them for it again.

Once they receive the signed paperwork from you, THEN it takes about a week to ten days, on average, to get the check. Either they didn't fully understand your question or you didn't fully understand their answer.