Well my son-in-law was laid off from his job yesterday, guess the company thought they could save a few bucks by hiring in a new guy for less pay. Not that they were paying him much anyway, but they hired the new guy for $8.00 an hr & were paying him $12. He'd been there for almost 5 years & was going to be 100% vested in his 401(k)...so I think that also had something to do with the company's decision...now he's only 60% vested, so that means the company will get some of their match money back.
I don't know what they are going to do. They have 5 children (3 his, 1 her's & 1 together) and neither of the absent parents pay their child support. No savings at all and were only making it, because we are able to help them out when the need arose. I wish I knew what to tell them, but the only time my dh was ever laid off was over 30 years ago. I know he qualifies for unenjoyment, but there is a cap and it's not based on family size, food stamps are something they already access, kids already have medicaid and they have to pay $110 per month for medicaid for her & him. My dd can make Abe scream, so I know she will do the best that she can with what she will have to work with.
He's been given the option of rolling over his 401(k), having it distributed to him in a lump sum payment (minus 20% for taxes & of course the 10% penalty will have to be paid next year at tax time) or leaving the money with the company plan. After giving it some thought I told my dd that they should lump sum the money since they are going to need it to live on and with their income level being what it has been they always get over $5000 back at tax time any way, so they will get the 20% back and who knows maybe the government will decide to ditch the penalty in situations like theirs.
I generally would never advise anyone to cash out their 401(k), but in these economic times you do what you have to do in order to live. The money would enable them to pay their house payment ahead for 6 months and pay their medicaid insurance premium for the same amount of time.
Last time he was laid off, he had a job within the week and never even drew his unenjoyment...this time I don't know. The job situation in our area sucks. Maybe now would be a good time for him to take advantage of our state's "No worker left behind" program and go back to get some training in something else.
I don't know what they are going to do. They have 5 children (3 his, 1 her's & 1 together) and neither of the absent parents pay their child support. No savings at all and were only making it, because we are able to help them out when the need arose. I wish I knew what to tell them, but the only time my dh was ever laid off was over 30 years ago. I know he qualifies for unenjoyment, but there is a cap and it's not based on family size, food stamps are something they already access, kids already have medicaid and they have to pay $110 per month for medicaid for her & him. My dd can make Abe scream, so I know she will do the best that she can with what she will have to work with.
He's been given the option of rolling over his 401(k), having it distributed to him in a lump sum payment (minus 20% for taxes & of course the 10% penalty will have to be paid next year at tax time) or leaving the money with the company plan. After giving it some thought I told my dd that they should lump sum the money since they are going to need it to live on and with their income level being what it has been they always get over $5000 back at tax time any way, so they will get the 20% back and who knows maybe the government will decide to ditch the penalty in situations like theirs.
I generally would never advise anyone to cash out their 401(k), but in these economic times you do what you have to do in order to live. The money would enable them to pay their house payment ahead for 6 months and pay their medicaid insurance premium for the same amount of time.
Last time he was laid off, he had a job within the week and never even drew his unenjoyment...this time I don't know. The job situation in our area sucks. Maybe now would be a good time for him to take advantage of our state's "No worker left behind" program and go back to get some training in something else.