Quote from MurseSmith2020
The only thing is that I will be leaving my current employer all together in June of 2019 to start at a position within a hospital. The options I've seen when leaving an employer have been to transfer to new employers 401k plan, rollover into an IRA, or liquidate. I will have to do more research but I'm not sure what they offer for 401k's for part time employees and I'm not sure if I can take a loan from an IRA... can I? Or if I was able to transfer my 401k to another employer is there a certain amount of time I have to be there prior to taking a loan?
Your 401K company should have a customer service number you can call. Check all the paperwork that you should have received when you opened the account. From my understanding, you should be able to simply leave your money where it is until you start a new position. Admittedly this means the money is kind of stagnant because you're no longer contributing (or getting employer matching), but it will continue to gain interest while you decide what to do.
However, every plan in different and also it may be based upon your tenure with your current employer...these are all questions you want to ask the CSR at the company you invest with.
As an example, when I left a job about 3 years ago, I moved to a part-time position with a company that didn't offer a 401K. I made the move to part-time so that I could study more for the pre-requisites for nursing school. I contacted the 401K company and explained my situation, and I was able to leave my money in the 401K. It had continued to grow over those 3 years, even without any additional payments from me.
Had I liquidated the account, there is a 10% penalty (I think that is Federal law), plus you have to pay all the taxes on the amount because it is considered income. Remember that when you pay into your 401K at work, it is tax-free and reduces your taxable income. You do not pay any taxes on the deposits or any interest accrued until you start to draw on it in retirement....and hopefully by then there will be a hefty sum in there.
Hence, you will lose a lot up-front if you liquidate, not to mention how much you would lose out on in the long-term.
I would suggest contacting your HR and also talking with the 401K company to gather all your options. Every place of employment will have their own rules and you need to know what they are in your place of employment so that you can make an informed decision. For example, what are the implications to your 401K if you go part-time at the bank? Will you still be able to contribute? Will the bank still match your contributions if you are part-time? Will you no longer be able to pay into it at all?
If it was me I would keep the account open and contribute a nominal amount every paycheck - even as low as $25, for example, and then when you start at the hospital you can roll it over once you get a 401K established there.