Confused what to do with 401k

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Topic Author
stt816
Posts: 101
Joined: Wed Nov 07, 2018 4:59 pm

Confused what to do with 401k

Post by stt816 »

I haven’t been back to work since March. I technically am still employed by my company but can’t contribute to my 401k. Also they are now charging me 25 a month for “plan fees”

I’m not sure when I’ll be back or if they’ll just lay me off. I have about 100k in my individual and roth accounts and 27k in my 401k...I started my own business just in case I don’t get back to work and have been doing decent with it. I created an LLC so I have a solo 401k

What should I do?
Explorer
Posts: 607
Joined: Thu Oct 13, 2016 7:54 pm

Re: Confused what to do with 401k

Post by Explorer »

stt816 wrote: Wed Nov 11, 2020 9:38 pm I haven’t been back to work since March. I technically am still employed by my company but can’t contribute to my 401k

I’m not sure when I’ll be back or if they’ll just lay me off. I have about 100k in my individual and roth accounts and 27k in my 401k...I started my own business just in case I don’t get back to work and have been doing decent with it. I created an LLC so I have a solo 401k

They are also charging me 25 per month in the 401k plan. What should I do?
First, sorry for the hardship you are going through. You can't do much with 401(K) until you separate from the company. The 25 per month is that a fee for someone to manage your 401(k)?
Topic Author
stt816
Posts: 101
Joined: Wed Nov 07, 2018 4:59 pm

Re: Confused what to do with 401k

Post by stt816 »

Explorer wrote: Wed Nov 11, 2020 9:41 pm
stt816 wrote: Wed Nov 11, 2020 9:38 pm I haven’t been back to work since March. I technically am still employed by my company but can’t contribute to my 401k

I’m not sure when I’ll be back or if they’ll just lay me off. I have about 100k in my individual and roth accounts and 27k in my 401k...I started my own business just in case I don’t get back to work and have been doing decent with it. I created an LLC so I have a solo 401k

They are also charging me 25 per month in the 401k plan. What should I do?
First, sorry for the hardship you are going through. You can't do much with 401(K) until you separate from the company. The 25 per month is that a fee for someone to manage your 401(k)?

I was seeing you could cash out penalty free because of covid? Yes it says “plan fee”
Spirit Rider
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Joined: Fri Mar 02, 2007 2:39 pm

Re: Confused what to do with 401k

Post by Spirit Rider »

stt816 wrote: Wed Nov 11, 2020 9:52 pm I was seeing you could cash out penalty free because of covid? Yes it says “plan fee”
A CRD is only allowed, if you are a qualified individual.
  • You, your spouse or dependent have been diagnosed with covid-19.
  • You or your spouse have suffered adverse financial consequences from covid-19.
I don't know if the loss of a 401k or additional fees would rise to that level.
mpochwat
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Joined: Tue Nov 10, 2020 6:19 pm

Re: Confused what to do with 401k

Post by mpochwat »

Usually there are somewhat high administrative fees to run a 401k plan.

For example, I run one for my own business and it costs >$200/month. So while paying $25/month admin fee to your other employer sounds a bit high, it's not that unreasonable compared to what you might pay through your own company. Just my 2c.
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ruralavalon
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Re: Confused what to do with 401k

Post by ruralavalon »

stt816 wrote: Wed Nov 11, 2020 9:38 pm I haven’t been back to work since March. I technically am still employed by my company but can’t contribute to my 401k. Also they are now charging me 25 a month for “plan fees”

I’m not sure when I’ll be back or if they’ll just lay me off. I have about 100k in my individual and roth accounts and 27k in my 401k...I started my own business just in case I don’t get back to work and have been doing decent with it. I created an LLC so I have a solo 401k

What should I do?
mpochwat wrote: Wed Nov 11, 2020 11:39 pm Usually there are somewhat high administrative fees to run a 401k plan.

For example, I run one for my own business and it costs >$200/month. So while paying $25/month admin fee to your other employer sounds a bit high, it's not that unreasonable compared to what you might pay through your own company. Just my 2c.
I agree.

The plan fees are less than 0.01% of your 401k account balance. Not high enough to worry about.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started
an_asker
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Re: Confused what to do with 401k

Post by an_asker »

ruralavalon wrote: Thu Nov 12, 2020 12:21 pm
stt816 wrote: Wed Nov 11, 2020 9:38 pm I haven’t been back to work since March. I technically am still employed by my company but can’t contribute to my 401k. Also they are now charging me 25 a month for “plan fees”

I’m not sure when I’ll be back or if they’ll just lay me off. I have about 100k in my individual and roth accounts and 27k in my 401k...I started my own business just in case I don’t get back to work and have been doing decent with it. I created an LLC so I have a solo 401k

What should I do?
mpochwat wrote: Wed Nov 11, 2020 11:39 pm Usually there are somewhat high administrative fees to run a 401k plan.

For example, I run one for my own business and it costs >$200/month. So while paying $25/month admin fee to your other employer sounds a bit high, it's not that unreasonable compared to what you might pay through your own company. Just my 2c.
I agree.

The plan fees are less than 0.01% of your 401k account balance. Not high enough to worry about.
For OP, I am calculating plan fees > 1% not < 0.01%! $300/year on a $27k balance.
Topic Author
stt816
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Re: Confused what to do with 401k

Post by stt816 »

an_asker wrote: Thu Nov 12, 2020 1:06 pm
ruralavalon wrote: Thu Nov 12, 2020 12:21 pm
stt816 wrote: Wed Nov 11, 2020 9:38 pm I haven’t been back to work since March. I technically am still employed by my company but can’t contribute to my 401k. Also they are now charging me 25 a month for “plan fees”

I’m not sure when I’ll be back or if they’ll just lay me off. I have about 100k in my individual and roth accounts and 27k in my 401k...I started my own business just in case I don’t get back to work and have been doing decent with it. I created an LLC so I have a solo 401k

What should I do?
mpochwat wrote: Wed Nov 11, 2020 11:39 pm Usually there are somewhat high administrative fees to run a 401k plan.

For example, I run one for my own business and it costs >$200/month. So while paying $25/month admin fee to your other employer sounds a bit high, it's not that unreasonable compared to what you might pay through your own company. Just my 2c.
I agree.

The plan fees are less than 0.01% of your 401k account balance. Not high enough to worry about.
For OP, I am calculating plan fees > 1% not < 0.01%! $300/year on a $27k balance.
Right I was thinking the same. Didn’t know if it’s possible to do a Roth rollover and if that would be a good choice
an_asker
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Joined: Thu Jun 27, 2013 2:15 pm

Re: Confused what to do with 401k

Post by an_asker »

stt816 wrote: Thu Nov 12, 2020 1:42 pm
an_asker wrote: Thu Nov 12, 2020 1:06 pm
ruralavalon wrote: Thu Nov 12, 2020 12:21 pm
stt816 wrote: Wed Nov 11, 2020 9:38 pm I haven’t been back to work since March. I technically am still employed by my company but can’t contribute to my 401k. Also they are now charging me 25 a month for “plan fees”

I’m not sure when I’ll be back or if they’ll just lay me off. I have about 100k in my individual and roth accounts and 27k in my 401k...I started my own business just in case I don’t get back to work and have been doing decent with it. I created an LLC so I have a solo 401k

What should I do?
mpochwat wrote: Wed Nov 11, 2020 11:39 pm Usually there are somewhat high administrative fees to run a 401k plan.

For example, I run one for my own business and it costs >$200/month. So while paying $25/month admin fee to your other employer sounds a bit high, it's not that unreasonable compared to what you might pay through your own company. Just my 2c.
I agree.

The plan fees are less than 0.01% of your 401k account balance. Not high enough to worry about.
For OP, I am calculating plan fees > 1% not < 0.01%! $300/year on a $27k balance.
Right I was thinking the same. Didn’t know if it’s possible to do a Roth rollover and if that would be a good choice
I don't know the legalese to be 100%r sure, but my understanding is that you're stuck unless you quit the company. And if these fees are independent of the balance, it is worse for those with low balances.
humblecoder
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Joined: Thu Aug 06, 2020 8:46 am

Re: Confused what to do with 401k

Post by humblecoder »

Spirit Rider wrote: Wed Nov 11, 2020 10:16 pm
stt816 wrote: Wed Nov 11, 2020 9:52 pm I was seeing you could cash out penalty free because of covid? Yes it says “plan fee”
A CRD is only allowed, if you are a qualified individual.
  • You, your spouse or dependent have been diagnosed with covid-19.
  • You or your spouse have suffered adverse financial consequences from covid-19.
I don't know if the loss of a 401k or additional fees would rise to that level.
Not working since March would qualify as an "adverse financial consequence" in my book.
Spirit Rider
Posts: 13910
Joined: Fri Mar 02, 2007 2:39 pm

Re: Confused what to do with 401k

Post by Spirit Rider »

humblecoder wrote: Thu Nov 12, 2020 5:57 pm Not working since March would qualify as an "adverse financial consequence" in my book.
I assumed (maybe incorrectly), the "still technically employed" to mean still being paid.
tashnewbie
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Joined: Thu Apr 23, 2020 12:44 pm

Re: Confused what to do with 401k

Post by tashnewbie »

OP: based on your post, I assumed you’re maybe furloughed and not receiving a paycheck from your employer. Is that correct? If not, what’s the specific circumstances of your employment with that company?
Topic Author
stt816
Posts: 101
Joined: Wed Nov 07, 2018 4:59 pm

Re: Confused what to do with 401k

Post by stt816 »

tashnewbie wrote: Thu Nov 12, 2020 9:26 pm OP: based on your post, I assumed you’re maybe furloughed and not receiving a paycheck from your employer. Is that correct? If not, what’s the specific circumstances of your employment with that company?
I'm a personal trainer. The gym/company is so unorganized. I stopped working in March and I'm still technically an employee because I receive unemployment benefits still and they're talking about bringing me back on. They barely talk to me and keep me up to date, but I'd like to stay with them for benefits such as insurance. The 401k isnt much, they only match 1k but I still take advantage of it..I'm not 100% counting on going back/them keeping me because we don't know for sure what the future of gyms will be...

Does that help any? Not sure what I should be doing with this plan.
tashnewbie
Posts: 1158
Joined: Thu Apr 23, 2020 12:44 pm

Re: Confused what to do with 401k

Post by tashnewbie »

If you've not been receiving normal pay during your furlough, I'd say you definitely have experienced adverse financial consequences due to COVID. Sounds like you may be eligible to take a CARES Act distribution. I don't know any details about that and whether and when you might have to repay that.

Otherwise, if you're not eligible for a CARES Act distribution or don't want to do one, I don't think you can do anything with your 401k until you separate from employment with this employer.
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