Thread regarding Charles Schwab Corp. layoffs

Valid sentiment and in a similar situation. I've been selling some of the ESPP and haven't needed to dip too much into other accounts to cover costs, but I only have a partner and no children. I absolutely agree and will be moving accounts once I have another job which is looking up these last couple of weeks fingers crossed. Also, don't listen to the toxic posts about how you're not doing enough, it's a tough job market. It was tough before the layoff and people are going through different things as we navigate this. Just generalizing another person's experience as lazy or unprepared is shallow especially when you don't have a larger picture of the situation they're in. I want all the ex-Schwabbies to go off and have a good life better than the situation they left CS from because frankly it was a toxic environment and didn't realize it had gotten so bad by the time I was laid off.

Another item to consider is that 401ks are covered by ERISA and are generally beyond the reach of creditors. IRAs on the other hand may not be protected from creditors depending on the state you are in. They are protected to a certain point in bankruptcy, but the state depends on other creditor claims.

SO, make sure you have all the information before moving especially if you have debts that might become delinquent, because IRAs are not as protected.

To go from a 401k to an IRA is called. Direct Rolliver. It has to be initiated by you working with the company where you have your IRA - - which is referred to as succesor custodian. They will send a Letter of Acceptance to the plan and the plan will send a Direct Rollover check to the successor custodian and your check will be booked into your IRA as a direct rollover cont. A direct rollover is a reportable event, meaning that the plan sends you a 1099R next Feb and the IRA company sends you a form 5498. You provide to your tax preparer to reflect on your tax return, but there is no tax liability.

If your were to go directly to take money out of your 401k, they are obligated to withhold 20% for federal taxes since they don't have the Letter of Acceptance which serves as proof that your are rolling into an IRA. My suggestion is to rollover into an IRA and then if you need funds, you take distributions from your IRA. The previous poster mentioned 55t distributions if you are 55 years of age or older. That is an option and is a way to avoid the 10% premature penalty since money taken out of IRA prior to age 59.5 is considered a premature distribution. Best of luck.

If you were 55 or older in 2024, including if you turn 55 in 2024, be sure to look into the rule of 55 before rolling over. That rule allows for penalty free withdrawals (but still taxes) if you are laid off or leave your job once you reach that age. Critically, you must keep the money in the plan of the employer you left. If you roll it over that benefit disappears.

No one expects to be unemployed? Really? We’ve only had layoffs for years and four months warning on this one.

And you haven’t been out for a year, although that’s possible.

But let’s get religion. You contributed to your 401K and had no savings, right? Knowing that you might be laid off. So it was arrogance or hubris.

You’re either a bad troll or very negative. Not once have you asked for help here. Not once. And you’ve attacked anyone offering help.

Keep playing the pity party. It’s hard to have sympathy and if genuine it clearly ain’t working for you.

S/he’s getting down voted because this loaded with miserable trolls. Let the down voting begin!

Not sure why OP is getting down-voted. Advice sounds prudent. Make sure the move from 401k to IRA is a rollover (no distribution to you; pure transfer from the 401k account to the IRA account) so you don't inadvertently create a taxable event.