I'm leaving my current job in early February. I am not fully vested in the employer's 401(a) retirement plan, so I receive 67% of the value of my account on my date of separation (2/2). At that point, the standard options for what to do with the account will kick in: rollover, lump-sum distribution, etc...
I'm young, so my 401(a) from this employer is currently invested 100% in a total stock market index fund. My fear is that events on or around 1/20 may cause extreme volatility in the stock market between now and early February. Specifically, that the value of my account may drop sharply over the next few weeks and not recover/stabilize before 2/2 when 67% of my account vests.
Is there any benefit to temporarily moving the money in my 401(a) account out of the market and into cash, then immediately moving it back into the market after my portion vests?
My (possibly flawed) logic behind this move would be:
- My account is currently worth $9,000. If I lock in that value now, $6,000 is vested.
- If I let it ride until 2/2 and my account value drops to $8,000, only $5,360 will vest.