Hey, Community folks, I’m hoping to get insight into this issue:
My 24-year-old daughter just switched jobs. Her previous employer said that it would be taking an amount out of her 401(k) every day she left it there because she’s no longer an employee. That sounds pretty fishy, but let’s leave that aside for now because in response she took a full withdrawal of her funds. Taxes were withheld and she received a check.
Certainly, that’s not ideal — a rollover to a new 401(k) would be better, but her new job has not yet provided information about any sort of workplace retirement savings plan.
She’s deposited the funds into savings for now. Is it too late to put them into an IRA to avoid that tax hit? Or is there a grace period for getting into a new 401(k)? I’m hoping it’s not too late to take action and get withheld taxes refunded!