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Lost Your Job but Still Have a 401(k)? Here’s What to Do With It	Lost Your Job but Still Have a 401(k)? Here’s What to Do With It
2020-06-05 14:24:35 UTC	2020-06-08 20:14:34 UTC (3 days later)
Tens of millions of Americans have lost their jobs as the coronavirus ravages the economy, bringing the unemployment rate to a Great Depression-level 14.7 percent — and many are looking for emergency lifelines to meet living expenses.	Tens of millions of Americans have lost their jobs as the coronavirus ravages the economy, bringing the unemployment rate to a Great Depression-level 14.7 percent — and many are looking for emergency lifelines to meet living expenses.
Retirement accounts will be a tempting option. Last year, about 63 million households had defined contribution plan accounts, and 46.4 million households owned I.R.A.s, according to the Investment Company Institute.	Retirement accounts will be a tempting option. Last year, about 63 million households had defined contribution plan accounts, and 46.4 million households owned I.R.A.s, according to the Investment Company Institute.
The CARES Act signed into law in March provides flexible hardship withdrawal options for 401(k) and individual retirement accounts. But people who have lost their jobs and don’t need to tap their retirement account early still have a decision to make: Leave the savings in the former employer’s plan, or roll them over to an I.R.A. In the event that a former employer goes out of business and terminates the plan, your choice is a rollover or taking a direct distribution. The best choice will depend on a number of factors.	The CARES Act signed into law in March provides flexible hardship withdrawal options for 401(k) and individual retirement accounts. But people who have lost their jobs and don’t need to tap their retirement account early still have a decision to make: Leave the savings in the former employer’s plan, or roll them over to an I.R.A. In the event that a former employer goes out of business and terminates the plan, your choice is a rollover or taking a direct distribution. The best choice will depend on a number of factors.
If you lost a job because of the coronavirus crisis, the CARES Act offers special exemptions from the usual withdrawal rules for 401(k) or I.R.A. accounts. Adoption of the exemptions is voluntary for employers, but most seem to be offering them; Fidelity reports that 96 percent of the plan sponsors that it works with have added these features, for example.	If you lost a job because of the coronavirus crisis, the CARES Act offers special exemptions from the usual withdrawal rules for 401(k) or I.R.A. accounts. Adoption of the exemptions is voluntary for employers, but most seem to be offering them; Fidelity reports that 96 percent of the plan sponsors that it works with have added these features, for example.
Normally, income taxes are due on withdrawals from these accounts in the year you take the distribution. And if you are younger than 59½, a 10 percent penalty is levied. Under the CARES Act, you can withdraw 100 percent of your account, up to $100,000, without the usual 10 percent penalty. The income taxes are still due, but you can spread out payments over three years or redeposit the withdrawn sums anytime during that period. (The CARES Act also relaxes the rules on loans from 401(k) plans, but most employers won’t permit loans if you no longer work for them.)	Normally, income taxes are due on withdrawals from these accounts in the year you take the distribution. And if you are younger than 59½, a 10 percent penalty is levied. Under the CARES Act, you can withdraw 100 percent of your account, up to $100,000, without the usual 10 percent penalty. The income taxes are still due, but you can spread out payments over three years or redeposit the withdrawn sums anytime during that period. (The CARES Act also relaxes the rules on loans from 401(k) plans, but most employers won’t permit loans if you no longer work for them.)
“This is probably the most flexible distribution and taxation arrangement that I’ve ever seen for retirement plan benefits,” says Fred Reish, a lawyer who specializes in employee benefits. “It’s really quite extraordinary.”	“This is probably the most flexible distribution and taxation arrangement that I’ve ever seen for retirement plan benefits,” says Fred Reish, a lawyer who specializes in employee benefits. “It’s really quite extraordinary.”
The prospect of cracking open retirement piggy banks to meet emergency needs doesn’t bode well for the nation’s retirement savings, which reflected economic inequalities before the crisis that are likely to worsen now. Widespread drawdowns under the emergency law may underscore a post-crisis need to develop more robust emergency saving options.	The prospect of cracking open retirement piggy banks to meet emergency needs doesn’t bode well for the nation’s retirement savings, which reflected economic inequalities before the crisis that are likely to worsen now. Widespread drawdowns under the emergency law may underscore a post-crisis need to develop more robust emergency saving options.
“People will say that we want to preserve 401(k) accounts for retirement — and that’s a good cause,” Mr. Reish said. “But not being evicted from your apartment, being able to buy food and put gas in your car also is important. Retirement isn’t the only thing that happens in life.”	“People will say that we want to preserve 401(k) accounts for retirement — and that’s a good cause,” Mr. Reish said. “But not being evicted from your apartment, being able to buy food and put gas in your car also is important. Retirement isn’t the only thing that happens in life.”
When you leave a job, your former employer’s matching contributions — one of the strongest incentives for participating — come to an end. But if the plan features a simple menu of high-quality mutual funds and low costs, other factors might persuade you to stay.	When you leave a job, your former employer’s matching contributions — one of the strongest incentives for participating — come to an end. But if the plan features a simple menu of high-quality mutual funds and low costs, other factors might persuade you to stay.
Your fiduciary protections in a 401(k) are stronger than in an I.R.A. Under federal law, 401(k) plan sponsors must meet a strict fiduciary standard to act solely in the best interest of participants, and to select investment options with them in mind. And in recent years, litigation accusing plans of charging excessively high fees has encouraged lower investment costs.	Your fiduciary protections in a 401(k) are stronger than in an I.R.A. Under federal law, 401(k) plan sponsors must meet a strict fiduciary standard to act solely in the best interest of participants, and to select investment options with them in mind. And in recent years, litigation accusing plans of charging excessively high fees has encouraged lower investment costs.
“It’s been a very important factor driving sponsors to make changes,” Mr. Reish said. “There’s so much more attention paid today to expenses, use of institutional share classes and index funds than there was even 10 years ago.”	“It’s been a very important factor driving sponsors to make changes,” Mr. Reish said. “There’s so much more attention paid today to expenses, use of institutional share classes and index funds than there was even 10 years ago.”
The economic uncertainty points to one other reason you may want to leave your savings in a former employer’s plan rather than roll them over to an I.R.A.: By law, your assets are protected from creditors. Many states protect I.R.A. assets that originated in a 401(k), but regulations vary.	The economic uncertainty points to one other reason you may want to leave your savings in a former employer’s plan rather than roll them over to an I.R.A.: By law, your assets are protected from creditors. Many states protect I.R.A. assets that originated in a 401(k), but regulations vary.
Rolling over your 401(k) into an I.R.A. might make sense if your company plan has high fees, which can eat into returns significantly over many years of investing. This is often the case with small and medium-size plans, which can lack the buying power of large plans or their expertise in negotiating better prices.	Rolling over your 401(k) into an I.R.A. might make sense if your company plan has high fees, which can eat into returns significantly over many years of investing. This is often the case with small and medium-size plans, which can lack the buying power of large plans or their expertise in negotiating better prices.
A study by Morningstar of about 22,000 defined contribution plans found that average total costs paid by sponsors and participants varied widely. Some plans charge as little as 0.1 percent against your assets, and some small ones have total costs over 3 percent.	A study by Morningstar of about 22,000 defined contribution plans found that average total costs paid by sponsors and participants varied widely. Some plans charge as little as 0.1 percent against your assets, and some small ones have total costs over 3 percent.
Small plan investment menus “range from bad to very bad,” says Scott Puritz, managing director of Rebalance, which often works with clients on 401(k) rollovers.	Small plan investment menus “range from bad to very bad,” says Scott Puritz, managing director of Rebalance, which often works with clients on 401(k) rollovers.
On the website for BrightScope, you can look up your plan to see how it’s rated against its peers, including total plan cost. Mr. Puritz recommends writing to your former employer’s director of human resources, requesting a written response to this question: “What are all the fees I’m paying, direct or indirect, on my account?”	On the website for BrightScope, you can look up your plan to see how it’s rated against its peers, including total plan cost. Mr. Puritz recommends writing to your former employer’s director of human resources, requesting a written response to this question: “What are all the fees I’m paying, direct or indirect, on my account?”
Practical considerations could also support a rollover. Since most people work many jobs during their careers, it’s possible to wind up with multiple “stranded 401(k) accounts,” Mr. Puritz said. His firm often works with clients who might have five or six accounts that need to be consolidated. As those accounts age, retrieving them gets more challenging.	Practical considerations could also support a rollover. Since most people work many jobs during their careers, it’s possible to wind up with multiple “stranded 401(k) accounts,” Mr. Puritz said. His firm often works with clients who might have five or six accounts that need to be consolidated. As those accounts age, retrieving them gets more challenging.
“Five or 10 years later, the employers change, phone numbers change — your contact with the human resources person is gone,” Mr. Puritz said. “It gets more painful the further away it gets from you.”	“Five or 10 years later, the employers change, phone numbers change — your contact with the human resources person is gone,” Mr. Puritz said. “It gets more painful the further away it gets from you.”
If you are near retirement and plan to make regular account withdrawals, flexible access to your money could be another reason for a rollover. Just 54 percent of workplace plans offered installment drawdown options in 2018, according to the Plan Sponsor Council of America.	If you are near retirement and plan to make regular account withdrawals, flexible access to your money could be another reason for a rollover. Just 54 percent of workplace plans offered installment drawdown options in 2018, according to the Plan Sponsor Council of America.
And give strong consideration to a rollover if your former employer fails and terminates the 401(k) plan. When a plan terminates, workers need to either roll over their accounts or take cash distributions. A distribution would generate income taxes and penalties for early withdrawal for those younger than 59½.	And give strong consideration to a rollover if your former employer fails and terminates the 401(k) plan. When a plan terminates, workers need to either roll over their accounts or take cash distributions. A distribution would generate income taxes and penalties for early withdrawal for those younger than 59½.
Updated June 5, 2020	Updated June 5, 2020
	A study by European scientists is the first to document a strong statistical link between genetic variations and Covid-19, the illness caused by the coronavirus. Having Type A blood was linked to a 50 percent increase in the likelihood that a patient would need to get oxygen or to go on a ventilator, according to the new study.
The unemployment rate fell to 13.3 percent in May, the Labor Department said on June 5, an unexpected improvement in the nation’s job market as hiring rebounded faster than economists expected. Economists had forecast the unemployment rate to increase to as much as 20 percent, after it hit 14.7 percent in April, which was the highest since the government began keeping official statistics after World War II. But the unemployment rate dipped instead, with employers adding 2.5 million jobs, after more than 20 million jobs were lost in April.	The unemployment rate fell to 13.3 percent in May, the Labor Department said on June 5, an unexpected improvement in the nation’s job market as hiring rebounded faster than economists expected. Economists had forecast the unemployment rate to increase to as much as 20 percent, after it hit 14.7 percent in April, which was the highest since the government began keeping official statistics after World War II. But the unemployment rate dipped instead, with employers adding 2.5 million jobs, after more than 20 million jobs were lost in April.
Mass protests against police brutality that have brought thousands of people onto the streets in cities across America are raising the specter of new coronavirus outbreaks, prompting political leaders, physicians and public health experts to warn that the crowds could cause a surge in cases. While many political leaders affirmed the right of protesters to express themselves, they urged the demonstrators to wear face masks and maintain social distancing, both to protect themselves and to prevent further community spread of the virus. Some infectious disease experts were reassured by the fact that the protests were held outdoors, saying the open air settings could mitigate the risk of transmission.	Mass protests against police brutality that have brought thousands of people onto the streets in cities across America are raising the specter of new coronavirus outbreaks, prompting political leaders, physicians and public health experts to warn that the crowds could cause a surge in cases. While many political leaders affirmed the right of protesters to express themselves, they urged the demonstrators to wear face masks and maintain social distancing, both to protect themselves and to prevent further community spread of the virus. Some infectious disease experts were reassured by the fact that the protests were held outdoors, saying the open air settings could mitigate the risk of transmission.
Exercise researchers and physicians have some blunt advice for those of us aiming to return to regular exercise now: Start slowly and then rev up your workouts, also slowly. American adults tended to be about 12 percent less active after the stay-at-home mandates began in March than they were in January. But there are steps you can take to ease your way back into regular exercise safely. First, “start at no more than 50 percent of the exercise you were doing before Covid,” says Dr. Monica Rho, the chief of musculoskeletal medicine at the Shirley Ryan AbilityLab in Chicago. Thread in some preparatory squats, too, she advises. “When you haven’t been exercising, you lose muscle mass.” Expect some muscle twinges after these preliminary, post-lockdown sessions, especially a day or two later. But sudden or increasing pain during exercise is a clarion call to stop and return home.	Exercise researchers and physicians have some blunt advice for those of us aiming to return to regular exercise now: Start slowly and then rev up your workouts, also slowly. American adults tended to be about 12 percent less active after the stay-at-home mandates began in March than they were in January. But there are steps you can take to ease your way back into regular exercise safely. First, “start at no more than 50 percent of the exercise you were doing before Covid,” says Dr. Monica Rho, the chief of musculoskeletal medicine at the Shirley Ryan AbilityLab in Chicago. Thread in some preparatory squats, too, she advises. “When you haven’t been exercising, you lose muscle mass.” Expect some muscle twinges after these preliminary, post-lockdown sessions, especially a day or two later. But sudden or increasing pain during exercise is a clarion call to stop and return home.
States are reopening bit by bit. This means that more public spaces are available for use and more and more businesses are being allowed to open again. The federal government is largely leaving the decision up to states, and some state leaders are leaving the decision up to local authorities. Even if you aren’t being told to stay at home, it’s still a good idea to limit trips outside and your interaction with other people.	States are reopening bit by bit. This means that more public spaces are available for use and more and more businesses are being allowed to open again. The federal government is largely leaving the decision up to states, and some state leaders are leaving the decision up to local authorities. Even if you aren’t being told to stay at home, it’s still a good idea to limit trips outside and your interaction with other people.
Touching contaminated objects and then infecting ourselves with the germs is not typically how the virus spreads. But it can happen. A number of studies of flu, rhinovirus, coronavirus and other microbes have shown that respiratory illnesses, including the new coronavirus, can spread by touching contaminated surfaces, particularly in places like day care centers, offices and hospitals. But a long chain of events has to happen for the disease to spread that way. The best way to protect yourself from coronavirus — whether it’s surface transmission or close human contact — is still social distancing, washing your hands, not touching your face and wearing masks.	Touching contaminated objects and then infecting ourselves with the germs is not typically how the virus spreads. But it can happen. A number of studies of flu, rhinovirus, coronavirus and other microbes have shown that respiratory illnesses, including the new coronavirus, can spread by touching contaminated surfaces, particularly in places like day care centers, offices and hospitals. But a long chain of events has to happen for the disease to spread that way. The best way to protect yourself from coronavirus — whether it’s surface transmission or close human contact — is still social distancing, washing your hands, not touching your face and wearing masks.
Common symptoms include fever, a dry cough, fatigue and difficulty breathing or shortness of breath. Some of these symptoms overlap with those of the flu, making detection difficult, but runny noses and stuffy sinuses are less common. The C.D.C. has also added chills, muscle pain, sore throat, headache and a new loss of the sense of taste or smell as symptoms to look out for. Most people fall ill five to seven days after exposure, but symptoms may appear in as few as two days or as many as 14 days.	Common symptoms include fever, a dry cough, fatigue and difficulty breathing or shortness of breath. Some of these symptoms overlap with those of the flu, making detection difficult, but runny noses and stuffy sinuses are less common. The C.D.C. has also added chills, muscle pain, sore throat, headache and a new loss of the sense of taste or smell as symptoms to look out for. Most people fall ill five to seven days after exposure, but symptoms may appear in as few as two days or as many as 14 days.
If air travel is unavoidable, there are some steps you can take to protect yourself. Most important: Wash your hands often, and stop touching your face. If possible, choose a window seat. A study from Emory University found that during flu season, the safest place to sit on a plane is by a window, as people sitting in window seats had less contact with potentially sick people. Disinfect hard surfaces. When you get to your seat and your hands are clean, use disinfecting wipes to clean the hard surfaces at your seat like the head and arm rest, the seatbelt buckle, the remote, screen, seat back pocket and the tray table. If the seat is hard and nonporous or leather or pleather, you can wipe that down, too. (Using wipes on upholstered seats could lead to a wet seat and spreading of germs rather than killing them.)	If air travel is unavoidable, there are some steps you can take to protect yourself. Most important: Wash your hands often, and stop touching your face. If possible, choose a window seat. A study from Emory University found that during flu season, the safest place to sit on a plane is by a window, as people sitting in window seats had less contact with potentially sick people. Disinfect hard surfaces. When you get to your seat and your hands are clean, use disinfecting wipes to clean the hard surfaces at your seat like the head and arm rest, the seatbelt buckle, the remote, screen, seat back pocket and the tray table. If the seat is hard and nonporous or leather or pleather, you can wipe that down, too. (Using wipes on upholstered seats could lead to a wet seat and spreading of germs rather than killing them.)
Taking one’s temperature to look for signs of fever is not as easy as it sounds, as “normal” temperature numbers can vary, but generally, keep an eye out for a temperature of 100.5 degrees Fahrenheit or higher. If you don’t have a thermometer (they can be pricey these days), there are other ways to figure out if you have a fever, or are at risk of Covid-19 complications.	Taking one’s temperature to look for signs of fever is not as easy as it sounds, as “normal” temperature numbers can vary, but generally, keep an eye out for a temperature of 100.5 degrees Fahrenheit or higher. If you don’t have a thermometer (they can be pricey these days), there are other ways to figure out if you have a fever, or are at risk of Covid-19 complications.
The C.D.C. has recommended that all Americans wear cloth masks if they go out in public. This is a shift in federal guidance reflecting new concerns that the coronavirus is being spread by infected people who have no symptoms. Until now, the C.D.C., like the W.H.O., has advised that ordinary people don’t need to wear masks unless they are sick and coughing. Part of the reason was to preserve medical-grade masks for health care workers who desperately need them at a time when they are in continuously short supply. Masks don’t replace hand washing and social distancing.	The C.D.C. has recommended that all Americans wear cloth masks if they go out in public. This is a shift in federal guidance reflecting new concerns that the coronavirus is being spread by infected people who have no symptoms. Until now, the C.D.C., like the W.H.O., has advised that ordinary people don’t need to wear masks unless they are sick and coughing. Part of the reason was to preserve medical-grade masks for health care workers who desperately need them at a time when they are in continuously short supply. Masks don’t replace hand washing and social distancing.
If you’ve been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others.	If you’ve been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others.
If you’re sick and you think you’ve been exposed to the new coronavirus, the C.D.C. recommends that you call your healthcare provider and explain your symptoms and fears. They will decide if you need to be tested. Keep in mind that there’s a chance — because of a lack of testing kits or because you’re asymptomatic, for instance — you won’t be able to get tested.	If you’re sick and you think you’ve been exposed to the new coronavirus, the C.D.C. recommends that you call your healthcare provider and explain your symptoms and fears. They will decide if you need to be tested. Keep in mind that there’s a chance — because of a lack of testing kits or because you’re asymptomatic, for instance — you won’t be able to get tested.
Some industry experts worry that widespread plan terminations are on the horizon, particularly among smaller employers. A recent poll of consultants to workplace plans by the National Association of Plan Advisors concluded that over 200,000 small-business plans are at risk of termination from the pandemic.	Some industry experts worry that widespread plan terminations are on the horizon, particularly among smaller employers. A recent poll of consultants to workplace plans by the National Association of Plan Advisors concluded that over 200,000 small-business plans are at risk of termination from the pandemic.
Keep in mind that the purpose of a rollover is to maintain the tax-deferred status of the assets without creating a taxable distribution or incurring penalties. Rolling over funds from a 401(k) to an I.R.A. typically takes two to four weeks; you have 60 days to deposit funds into the I.R.A. in order to keep the transaction nontaxable. The most efficient approach is a direct rollover, in which your 401(k) plan drafts a check or wire transfer made out to the new I.R.A. custodian, not to you.	Keep in mind that the purpose of a rollover is to maintain the tax-deferred status of the assets without creating a taxable distribution or incurring penalties. Rolling over funds from a 401(k) to an I.R.A. typically takes two to four weeks; you have 60 days to deposit funds into the I.R.A. in order to keep the transaction nontaxable. The most efficient approach is a direct rollover, in which your 401(k) plan drafts a check or wire transfer made out to the new I.R.A. custodian, not to you.
“The most important thing is to just get it done, and in that 60-day time frame,” Mr. Puritz said. “Inertia is the enemy.”	“The most important thing is to just get it done, and in that 60-day time frame,” Mr. Puritz said. “Inertia is the enemy.”
Several large investment firms — Vanguard, Charles Schwab and Fidelity Investments — have evolved into giant supermarkets offering mutual funds across one another’s platforms. Pick one where you would like to consolidate most or all of your non-workplace accounts going forward, Mr. Puritz advises, and then roll your account into a low-cost total market index fund. These cost as little as 0.03 percent.	Several large investment firms — Vanguard, Charles Schwab and Fidelity Investments — have evolved into giant supermarkets offering mutual funds across one another’s platforms. Pick one where you would like to consolidate most or all of your non-workplace accounts going forward, Mr. Puritz advises, and then roll your account into a low-cost total market index fund. These cost as little as 0.03 percent.
But rollovers come with risks, too. The fiduciary obligations of advisers and brokers to act in your best interest were weakened with the demise of the Department of Labor’s fiduciary rule in 2018. A new standard adopted by the Securities and Exchange Commission, which takes effect on June 30, does require that rollover recommendations be in the best interest of the customer.	But rollovers come with risks, too. The fiduciary obligations of advisers and brokers to act in your best interest were weakened with the demise of the Department of Labor’s fiduciary rule in 2018. A new standard adopted by the Securities and Exchange Commission, which takes effect on June 30, does require that rollover recommendations be in the best interest of the customer.