How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
A new question is answered every 9 seconds
Ask a Employment Law question
Type Your Employment Law Question Here...
characters left:
3 Employment Lawyers are Online Now

Questions about 401K Rules

What is a 401k?

A 401k is a long-term plan for saving towards retirement. It actually is named after the section of the IRS laws that allow financial planning. Usually, 401k plans are only available through an employer where money is taken out of pay and invested into money market funds, growth funds or other types of retirement savings accounts that accumulate over time. Many times the confusion from one plan to another for investing the 401k can bring many questions. Ask an Expert any of your 401k questions for quick and affordable answers.

Can someone roll his or her 401K into an IRA while collecting unemployment in Colorado? They are not withdrawing any money as cash.

Under Sections 8-73-110 (3) (A) & (C) of the state of Colorado Employment Security Act, since if you do not reinvest every penny of the 401(K) in an IRA or Keogh plan, the entire amount 401(K) was being treated as a lump-sum retirement payment. If you roll the whole 401(K) over, then it is not calculated against you for unemployment.

Can someone’s former employer withhold a party’s vested 401k funds for eight to nine months before releasing it to the party?

If the individual is vested, it must be paid on demand. There is no basis for the delay. Unless it can point to a specific clause in the investment that requires funds to remain closed for a certain period affecting you, it cannot do so, and you may pursue a complaint with the labor board.

Is a 401k distribution, considered income when reporting to California EDD?

Yes. The individual should register it as income during the week that the individual got the distribution. It’s not earned income, therefore it would only effect that week of benefits.

Is it legal to use your 401k to buy a franchise without penalty? Some say yes some say no. the party has not spoken to a lawyer though. Does the IRS frown upon them?

It is legal to use the 401K finances to purchase a franchise, but if the individual were under 59 1/2 they would be given hit with penalties for early withdrawal, and distribution. Seeing as the individual is using the finances in a way that is not authorized under the individual’s 401K account, named on the individual and for an outside asset. Removing funds for an investment is not one of the permitted withdrawals that are penalty free. Therefore, while it is officially legal to use the funds for a purchase, it is extremely costly due to the additional tax penalties.

If someone is enrolled in a company’s 401K program, and they was contributing until July, when for some reason (they are saying systems glitch) the party was dropped for it, so nothing was taken out and no match was given. No they are saying, sorry, the company can add the party back in again, but cannot do anything about the past 6 months. Does someone have any recourse?

In most cases, the federal tax law deems when deposits to 401k’s can be made and if the company made an error inadvertently stopping the contributions coming out of our check and therefore stops making them into the 401k fund, the laws will not allow them to go back in and fix it after the fact (it is to prevent people from adding to their 401k’s at the end of the year to avoid taxes). So, as long as they didn’t take it out of your check to begin with all you can do is monitor your payroll stubs in the future and be sure they are deducting it each pay period.

401K is a very diverse topic. It can span one question after another. There are additional questions that could come up. Such as: 401k contribution limits, 401K hardship withdrawal, and 401K problems. Experts can help by answering any questions that you may have.
Ask a Employment Law question
Type Your Employment Law Question Here...
characters left:
3 Employment Lawyers are Online Now

How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

JustAnswer in the News:

 
 
 
Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.
 
 
 

What Customers are Saying:

 
 
 
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
< Last | Next >
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex Los Angeles, CA
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP Hesperia, CA
  • I couldn't be more satisfied! This is the site I will always come to when I need a second opinion. Justin Kernersville, NC
  • Just let me say that this encounter has been entirely professional and most helpful. I liked that I could ask additional questions and get answered in a very short turn around. Esther Woodstock, NY
  • Thank you so much for taking your time and knowledge to support my concerns. Not only did you answer my questions, you even took it a step further with replying with more pertinent information I needed to know. Robin Elkton, Maryland
  • He answered my question promptly and gave me accurate, detailed information. If all of your experts are half as good, you have a great thing going here. Diane Dallas, TX
 
 
 

Meet The Experts:

 
 
 
  • Ron

    ASE Certified Technician

    Satisfied Customers:

    21119
    23 years with Ford specializing in drivability and electrical and AC. Ford certs and ASE Certs
< Last | Next >
  • http://ww2.justanswer.com/uploads/FO/fordguy4u/2011-12-17_222940_HPIM1257.64x64.JPG Ron's Avatar

    Ron

    ASE Certified Technician

    Satisfied Customers:

    21119
    23 years with Ford specializing in drivability and electrical and AC. Ford certs and ASE Certs
  • http://ww2.justanswer.com/uploads/lyeung1/2010-07-25_032152_tn_IMG_0241.JPG Dr. Y.'s Avatar

    Dr. Y.

    Urologist

    Satisfied Customers:

    18367
    I am fellowship trained specializing in general urology and reconstructive urology.
  • http://ww2.justanswer.com/uploads/docjohn174/2008-12-13_170143_johnask.jpg John's Avatar

    John

    Home Appliance Technician

    Satisfied Customers:

    13453
    Appliance repair business owner for over 43 years.
  • http://ww2.justanswer.com/uploads/MU/multistatelaw/2011-11-27_173951_Tinaglamourshotworkglow102011.64x64.jpg Tina's Avatar

    Tina

    Lawyer

    Satisfied Customers:

    8472
    JD, BBA Over 25 years legal and business experience.
  • http://ww2.justanswer.com/uploads/dermdoc19/2010-09-30_160749_Photo_122807_015.JPG dermdoc19's Avatar

    dermdoc19

    Dermatologist

    Satisfied Customers:

    3827
    30 years practice in general and cosmetic dermatology
  • http://ww2.justanswer.com/uploads/BI/birddoctor/2012-6-22_173214_birddoctor.64x64.png Dr. Pat's Avatar

    Dr. Pat

    Bird Veterinarian

    Satisfied Customers:

    3383
    25+ years working primarily or exclusively with birds
  • http://ww2.justanswer.com/uploads/RY/rydergar/2012-6-6_192240_IMG0328.64x64.JPG Dr. Gary's Avatar

    Dr. Gary

    Cat Veterinarian

    Satisfied Customers:

    3291
    DVM, Emergency Veterinarian, BS (Physiology)
 
 
 

Recent 401K Questions

  • On April 24, 2014 received an email from my supervisor that

    On April 24, 2014 received an email from my supervisor that as April 25th the PAT group could no longer accommodate my restriction. I fell in 2012, not work related, and hurt my back. After almost two years of going through physical therapy, time off, shots, and then ablations nothing has changed. So when I got the email I asked what I was to do. Their answer was to sign up for short term disability. I did that and was denied. In the mean time I have no money coming in to pay my bills. When I told them that I had been denied, they told me to appeal. So I signed up for unemployment. I had send them the email and a letter from my doctor stating that I am able to work full time with the restrictions. It would then be evaluated at the next appointment. The deputy of the state where I applied for unemployment approved the unemployment. Two weeks ago the company called and asked about the appeal. I told them that as of May 31, I no longer had insurance because I was collecting unemployment and had not received anything from them to even pay if I had had the money. Plus nothing has changed with my back. Last week I called Fidelity to roll my 401K over and get some money because I am behind on all of my bills. They said that the company has be listed as "off without pay." When I contacted the company I told them that I am collecting unemployment and would like them to change my status so that I could get money from Fidelity. They say my job is there and they cannot lay me off because they would have to give severance and they don't want to do that, they want me to get well come back. The week before I got the email they had laid off 88 union workers and 15 staff people. So after all of this my question is, I would like the severance, but more so I want my status changed. They can keep their money. Also they ask me to resign, but the employment office if I did that I would loss my unemployment. What do I need to do to get this settled so that I can move on. I have a part-time job that I will be starting soon and just want out.
  • We are funding an LLC and possibly an additional S corp in

    We are funding an LLC and possibly an additional S corp in the future that we own 49% stock or member interests in with out self directed 401k. I am an employee of both companies.
    Our 401k expert is certain the transaction is legitimate since we are less than a 50% owner, the funds are secured by the invoices factored, we are charging an interest rate within usery limits of AZ, and we are not personally benefiting prior to retirement from any funds or proceeds.
    Our accountant is questioning whether this is a prohibited transaction. Our brokerage is stating they ran it by their lawyers and it is not. Just want a second opinion.
    Thanks
  • My New Jersey Unemployment Insurance claim was flagged because

    My New Jersey Unemployment Insurance claim was flagged because of my 401K. At this point I have not touched the 401K and I am waiting for a UI phone hearing to determine my benefits status. I will need to make a 401K lump sum withdraw of about $60K soon.

    My employer had not contributed to the 401K in many years. Will employer contributions before UI the base year count towards making the account a from of employer compensation?

    If the 401K account is considered employer compensation, will a $60K lump sum be considered in more than one week's benefit calculation?
< Last | Next >