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rated:
Hi,
What happens to 401k with the job lost and medical flexible spending account. Medical insurance benefits are valid until end of Nov. Please give us some information.

Thanks

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Downside is that you lose access to the institutional class of funds which have the lowest expense ratios. The Admiral s... (more)

doveroftke (Dec. 06, 2016 @ 8:25a) |

I have all the funds in vanguard retirement savings trust 3. No annual fee for my existing plan in company 401k. Is ther... (more)

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It's neither here nor there, but I don't think that counts as a Target date fund. Is there any particular reason you've ... (more)

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rated:
roll over to ira

One reason not to leave it in your 401k if you have rental properties and need reserves. Some 401k paperwork won't allow 100% of the amount to be used as reserves. So unless your 401k is spectular compared to your IRA, then I would roll it 

rated:
Spend all of the FRA if you can before you leave. The employer pays for it

What you do with the 401k depends on the quality of the plan. You can leave it with the employer or you can roll it over (preferably to Vanguard or Fidelity).

rated:
Best call HR for specifics. In general, FSA coverage will end when your medical coverage ends.

Your 401(k) can stay where it is if the balance is over $5k. If it is less than $5k they can force you to cashout or rollover. Unless you have excellent plan options, it is generally a good idea to roll it over to an IRA.

rated:
doveroftke said:   Best call HR for specifics. In general, FSA coverage will end when your medical coverage ends.


 

  Not complete. Spend up to your planned 2016 Contribution level if its feasible

rated:
With Medical Flex Spending Account, make sure you spend the entire amount. years ago, I declared 3500 for the upcoming year, but was then laid off in January. As the account is fully funded, it got to spend all $3500 for my kids braces, yet only contributed 1/12th of the amount.

rated:
rufflesinc said:   roll over to ira

One reason not to leave it in your 401k if you have rental properties and need reserves. Some 401k paperwork won't allow 100% of the amount to be used as reserves. So unless your 401k is spectular compared to your IRA, then I would roll it 

  Thanks for the help. I have option to roll over, continue or lump sum. I will start roll over process. My company allows to invest in limited number of funds. If I roll over,  I will have more options in future in case.
Do i need to wait for roll over until I sing up separation agreement?

rated:
ellory said:   Spend all of the FRA if you can before you leave. The employer pays for it

What you do with the 401k depends on the quality of the plan. You can leave it with the employer or you can roll it over (preferably to Vanguard or Fidelity).

  My FSA contribution is $1200. My contributions will be close to $1050 I think. I will check with discovery and see.

rated:
doveroftke said:   Best call HR for specifics. In general, FSA coverage will end when your medical coverage ends.

Your 401(k) can stay where it is if the balance is over $5k. If it is less than $5k they can force you to cashout or rollover. Unless you have excellent plan options, it is generally a good idea to roll it over to an IRA.

 I am going to work on roll over. I have 45 days to sign and return separation agreement. I think, i can start roll over even before signing up separation agreement right?

rated:
ellory said:   
doveroftke said:   Best call HR for specifics. In general, FSA coverage will end when your medical coverage ends.


 

  Not complete. Spend up to your planned 2016 Contribution level if its feasible

  11/15 is termination day according to payroll. But today is termination day physically. HR told me my medical benefits are valid until 11/30.
 

rated:
drew2money said:   With Medical Flex Spending Account, make sure you spend the entire amount. years ago, I declared 3500 for the upcoming year, but was then laid off in January. As the account is fully funded, it got to spend all $3500 for my kids braces, yet only contributed 1/12th of the amount.
  I need to find a way to spend $1200 by 11/30. If I go with CORBA, i can continue using this balance. Otherwise, 11/30 is deadline. I need to think either to go with CORBA or spouse plan. Any suggestions on spending $1000 by 11/30. 

rated:
I have another question regarding separation agreement. I have 45 days to sign and return the papers (12/29). Then another 7 days to reconsider. Looks like severance package is going to be paid after returning papers only? If i wait until 12/29, are they going to pay severance package during 2017. Is it better to sign and done with now instead.

Thanks

rated:
rustum said:   
drew2money said:   With Medical Flex Spending Account, make sure you spend the entire amount. years ago, I declared 3500 for the upcoming year, but was then laid off in January. As the account is fully funded, it got to spend all $3500 for my kids braces, yet only contributed 1/12th of the amount.
  I need to find a way to spend $1200 by 11/30. If I go with CORBA, i can continue using this balance. Otherwise, 11/30 is deadline. I need to think either to go with CORBA or spouse plan. Any suggestions on spending $1000 by 11/30. 

  
Glad to see that you finally understand the rules about using by 11/30 or go with Cobra. What were you thinking were the expenses when you signed up for a big FSA?

With regards to 401K rollover, I advised my son to leave it with his old employer. This keeps the backdoor ROTH alive - else, I believe, you will have to pro-rate things with your IRA accounts and that will get messy. Also, by not merging into the new 401K, he has the option to move it to IRA whenever he wants. In my own case, I rolled over to one of the brokerages - got some nice transfer bonus (almost 2.5% of the amount value) + several hundred free trades. I have been making some aggressive trades in this account but I have several years of experience doing this. I was already messed up with backdoor ROTH several years ago - so that was not a consideration in my case.

rated:
PrincipalMember said:   
rustum said:   
drew2money said:   With Medical Flex Spending Account, make sure you spend the entire amount. years ago, I declared 3500 for the upcoming year, but was then laid off in January. As the account is fully funded, it got to spend all $3500 for my kids braces, yet only contributed 1/12th of the amount.
  I need to find a way to spend $1200 by 11/30. If I go with CORBA, i can continue using this balance. Otherwise, 11/30 is deadline. I need to think either to go with CORBA or spouse plan. Any suggestions on spending $1000 by 11/30. 

  
Glad to see that you finally understand the rules about using by 11/30 or go with Cobra. What were you thinking were the expenses when you signed up for a big FSA?

With regards to 401K rollover, I advised my son to leave it with his old employer. This keeps the backdoor ROTH alive - else, I believe, you will have to pro-rate things with your IRA accounts and that will get messy. Also, by not merging into the new 401K, he has the option to move it to IRA whenever he wants. In my own case, I rolled over to one of the brokerages - got some nice transfer bonus (almost 2.5% of the amount value) + several hundred free trades. I have been making some aggressive trades in this account but I have several years of experience doing this. I was already messed up with backdoor ROTH several years ago - so that was not a consideration in my case.

  We have option to roll over unused FSA balances. That is the reason I went with $1200. We spend around $300 so far. I need to find a way to spend another $800 by end of Nov. I haven't done any Roth IRA so far. Do I option to roll over any time until I find new job. HR told me something about deciding quickly before they send check for lump sum. 

Thanks

 

rated:
unfortunately I have never rolled over a 401k, only found out what happens when you don't roll one over! haha!

rated:
rufflesinc said:   unfortunately I have never rolled over a 401k, only found out what happens when you don't roll one over! haha!
 What issues we mig ht face in future without rollover? We have some limitations about invested in specific mutual funds.

rated:
There are lot of suggestion to roll over to IRA ...
contrary to that advice ... not to rollover if your state provide better protection in 401K against lawsuits (e.g. CA).
if you are starting a new job ... you can also rollover to new job's 401K ... but again totally depends on which 401K has better investment options.

rated:
rustum said:   
rufflesinc said:   unfortunately I have never rolled over a 401k, only found out what happens when you don't roll one over! haha!
 What issues we mig ht face in future without rollover? We have some limitations about invested in specific mutual funds.

  
If I understand correct ... you have option to rollover to IRA anytime ... rollover to new job's 401K may have time limit (set by new job's 401K).

Another thing to consider is you can't take a loan against old 401K (and rollover IRAs, if I'm correct) ... taking loan against 401K is not advisable in general.
 

rated:
Leave your 401k as is if that plan is good. You might want to do that especially if your job, or its affiliate, would rehire you within 12 months.
On a side note, try negotiating a better severance package before signing the papers, if you can.

rated:
I once spent $2,500 on gold crowns before that company laid off 10,000+ employees.

But I wouldn't trust your HR department. I don't how to say this PC but I'll try. Most [my exp. & many friends men & women] HR "heads" are ditzy, lazy, & have the companies interests WAY ahead of the employees. Some companies require degrees [not all you'd be amazed] but beyond that. They get & keep their HR jobs based on their looks & ongoing favors granted.

If I offended anyone I'm sorry. Didn't know how to convey my friends & my experiences with nicer words.

rated:
My Discovery FSA card stopped working from 11/16. When I checked with them, they told me my last service date is on 11/14. Card was working until 11/15. Discovery benefits asked me to contact HR. Not able to get any response from any HR so far. My separation guide says, I have until last day of the month fallowing my termination date. Why do they do like this. I am assuming it is very common thing.

Thanks

rated:
rustum said:     We have option to roll over unused FSA balances...

 

Just a note to point out for any readers that at most, a plan can only permit you to roll over up to $500.  IRS permits a plan to offer either a grace period (up to a 75-day extension) or the $500 rollover, but not both.  Even with the rollover provision, sounds like you were over-funded.

rated:
rustum said:   My Discovery FSA card stopped working from 11/16. When I checked with them, they told me my last service date is on 11/14. Card was working until 11/15. Discovery benefits asked me to contact HR. Not able to get any response from any HR so far. My separation guide says, I have until last day of the month fallowing my termination date. Why do they do like this. I am assuming it is very common thing.

Thanks

  Agreed very common.

rated:
They finally changed my last service date to 11/29/16 instead of 11/30/16. I do not have any hope of fixing it. I am planning to finish my $1200 spending by 11/29 itself. There are some expenses which dental doctor office not sure about insurance coverage. Is it better to pay them now. What happens in case insurance covers the expense and we get a refund from doctor office. May be I will just get some dental stuff from doctor office in stead of getting refund.

Thanks

rated:
rustum said:   What happens in case insurance covers the expense and we get a refund from doctor office.

Thanks

Don't ask, don't tell.  

rated:
We (Me and kids) are planning to switch to spouse insurance plan starting from 1st Dec. Premiums are little cheaper compared to COBRA. If we move to spouse insurance plan, does it mean it is end to our COBRA benefits. Is it not possible to switch back to COBRA in future.
Thanks

rated:
Do you wear glasses? I have really nice gold Cartier glasses that I never wear thanks to the use it or lose it FSA rules.

rated:
rustum said:   We (Me and kids) are planning to switch to spouse insurance plan starting from 1st Dec. Premiums are little cheaper compared to COBRA. If we move to spouse insurance plan, does it mean it is end to our COBRA benefits. Is it not possible to switch back to COBRA in future.
Thanks

  

If you don't sign up and pay for COBRA within 60 days, you lose the option to get it in the future.  If spouses plan is cheaper, why would you want it?

 

rated:
rustum said:   We (Me and kids) are planning to switch to spouse insurance plan starting from 1st Dec. Premiums are little cheaper compared to COBRA. If we move to spouse insurance plan, does it mean it is end to our COBRA benefits. Is it not possible to switch back to COBRA in future.
Thanks


Please, clarify: have you already made a COBRA election or waiver?
  
Within 60 days of the qualifying event you can elect COBRA benefits, waive COBRA benefits, and revoke your waiver of COBRA benefits (coverage is always retroactive to the date of the qualifying event). After 60 days, you cannot elect or switch back to COBRA.

You do have 45 days from when you elect COBRA to send in your premiums, so a common play is to make the election near the end of the 60 say window, giving yourself another 6-ish weeks to decide whether to actually pay for it or let them retroactively cancel it.

rated:
user1337 said:   Do you wear glasses? I have really nice gold Cartier glasses that I never wear thanks to the use it or lose it FSA rules.
 I have used up most of my FSA balance. Got some glasses based on doctor recommendation and RX sunglasses. Few dentist visits ate up all the balance.
 

rated:
Mickie3 said:   
rustum said:   We (Me and kids) are planning to switch to spouse insurance plan starting from 1st Dec. Premiums are little cheaper compared to COBRA. If we move to spouse insurance plan, does it mean it is end to our COBRA benefits. Is it not possible to switch back to COBRA in future.
Thanks

  

If you don't sign up and pay for COBRA within 60 days, you lose the option to get it in the future.  If spouses plan is cheaper, why would you want it?

 

In case if both of us are jobless for some time, wondering if we can have COBRA option again?

 

rated:
doveroftke said:   
rustum said:   We (Me and kids) are planning to switch to spouse insurance plan starting from 1st Dec. Premiums are little cheaper compared to COBRA. If we move to spouse insurance plan, does it mean it is end to our COBRA benefits. Is it not possible to switch back to COBRA in future.
Thanks


Please, clarify: have you already made a COBRA election or waiver?
  
Within 60 days of the qualifying event you can elect COBRA benefits, waive COBRA benefits, and revoke your waiver of COBRA benefits (coverage is always retroactive to the date of the qualifying event). After 60 days, you cannot elect or switch back to COBRA.

You do have 45 days from when you elect COBRA to send in your premiums, so a common play is to make the election near the end of the 60 say window, giving yourself another 6-ish weeks to decide whether to actually pay for it or let them retroactively cancel it.

I haven't communicated anything to COBRA so far. I have (Employee + Children) existing insurance until end of this month. Spouse is planning to add us to her insurance plan starting from next month. Is it mandatory to communicate something with (elect/waiver) COBRA within 60 days from qualifying event? If we elect and unuse COBRA insurance for 45 days, does it mean no need to pay premium. 
 

rated:
rustum said:   
doveroftke said:   
rustum said:   We (Me and kids) are planning to switch to spouse insurance plan starting from 1st Dec. Premiums are little cheaper compared to COBRA. If we move to spouse insurance plan, does it mean it is end to our COBRA benefits. Is it not possible to switch back to COBRA in future.
Thanks


Please, clarify: have you already made a COBRA election or waiver?
  
Within 60 days of the qualifying event you can elect COBRA benefits, waive COBRA benefits, and revoke your waiver of COBRA benefits (coverage is always retroactive to the date of the qualifying event). After 60 days, you cannot elect or switch back to COBRA.

You do have 45 days from when you elect COBRA to send in your premiums, so a common play is to make the election near the end of the 60 say window, giving yourself another 6-ish weeks to decide whether to actually pay for it or let them retroactively cancel it.

I haven't communicated anything to COBRA so far. I have (Employee + Children) existing insurance until end of this month. Spouse is planning to add us to her insurance plan starting from next month. Is it mandatory to communicate something with (elect/waiver) COBRA within 60 days from qualifying event? If we elect and unuse COBRA insurance for 45 days, does it mean no need to pay premium. 

  
If you don't let them know that you elect COBRA, it's an automatic waiver.

Yes, elect it when you're approaching 60 days, then don't send in a premium if you decide you don't want the coverage, you don't owe anything and any claims filed in that timeframe will be denied.

rated:
Thanks for the help.  I will keep my COBRA papers in case if I need them to sign and send it. 

rated:
rustum said:   Thanks for the help.  I will keep my COBRA papers in case if I need them to sign and send it. 
  Not a bad idea to literally keep everything ready --- forms filled out completely, check for the premium amount, signed and sealed in a stamped envelope. Have a trusted family member/friend drop it in the mail in case you get run over by a bus.

rated:
drew2money said:   With Medical Flex Spending Account, make sure you spend the entire amount. years ago, I declared 3500 for the upcoming year, but was then laid off in January. As the account is fully funded, it got to spend all $3500 for my kids braces, yet only contributed 1/12th of the amount.
  
Can a company try and collect that money from you if say you quit instead of getting laid off. Or is setting up fsa just a risk that companies take.

rated:
davef139 said:   
drew2money said:   With Medical Flex Spending Account, make sure you spend the entire amount. years ago, I declared 3500 for the upcoming year, but was then laid off in January. As the account is fully funded, it got to spend all $3500 for my kids braces, yet only contributed 1/12th of the amount.
  
Can a company try and collect that money from you if say you quit instead of getting laid off. Or is setting up fsa just a risk that companies take.

  
No, they can't. In general, though, I think the plans break even since many people don't use all of the money they contribute.

rated:
Hi,
I have checked with Vanguard. According to them I have all the flexibility (Continue to stay in existing plan with Vangurad, moving to future employee or moving to IRA). As of now my money is in some Target retirement fund with Vanguard (100% bond). But I am thinking about start investing my money (401k balance, bank savings). It is just sitting there without earning much. Moving to IRA might give me some flexibility when I start investing. Are there any downsides in moving my 401k to IRA? I have around 135k in my 401k account.

Thanks

rated:
rustum said:    Target retirement fund with Vanguard (100% bond).
 

  
Which fund? I didn't think that any Target funds were all bonds (I think VTINX is the most conservative at 70% bond, 30% equity).

rustum said:   Are there any downsides in moving my 401k to IRA?
 

  
Downside is that you lose access to the institutional class of funds which have the lowest expense ratios. The Admiral shares you'd have access to in a Vanguard IRA are slightly more expensive, but not by much. Does your plan charge an annual account fee? If not, I'd say leave it in the 401(k) (but with a better investment option!) and open an IRA with your other savings. You can always roll it over later if you find the 401(k) isn't meeting your needs.

Skipping 2 Messages...
rated:
rustum said:     I have all the funds in vanguard retirement savings trust 3. No annual fee for my existing plan in company 401k. Is there going to be annual fee with IRA? 
 

  
It's neither here nor there, but I don't think that counts as a Target date fund. Is there any particular reason you've avoided investing in something with the possibility for higher returns?

A good IRA (at Vanguard, Fidelity, or Schwab) won't have an account fee.

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