My wife left her job last year in October and is not seeking reemployment at the moment. She left her 401k alone as we do not need the money early and we are not planning to make further contributions without an employer. We called Fidelity directly after she left and they did confirm that she was able to leave the money alone to grow in that account without penalty and without further contribution.
Fast forward to now, her former company was bought out and she received an email that "Profit Sharing Plan and Trust has been terminated effective January 31, 2026."
The email continues "If action is not taken by April 15, 2026, Fidelity will liquidate your investments in your BrokerageLink® account. The assets will be deposited into the interest-bearing investment within your account….. IMPORTANT NOTICE:If you do not make a decision by May 15, 2026, Cadence Bank will direct Fidelity Investments to close your account and roll over your account assets to an IRA at Inspira Financial."
If possible, we want to leave this money alone and let it continue to grow behind the scenes until we are old enough to access it without penalty. Neither of us are familiar with IRAs but it seems like that would be option to avoid taking the disbursement directly. Please tell me what you would do?
Wife's former employer was bought out and they terminated the 401k plan. Email from Fidelity states all assets must be distributed. What to do?
byu/SmokeAndGnomes inpersonalfinance
Posted by SmokeAndGnomes
6 Comments
Roll over the 401k to IRA of matching types at Fidelity:
* Traditional to Traditional IRA
* Roth to Roth IRA
Invest properly. Read [IRA wiki](https://www.reddit.com/r/personalfinance/wiki/iras)
Make sure you do a rollover to an IRA. Do not do a distribution. If you do you will have to pay taxes and penalties.
Not any different than if you left the company, Roll it over.
open a Rollover IRA with Vanguard or Fidelity
roll over the old 401k into this IRA
its very simple, I’ve done this several times
Rolling it to an IRA (or her current employers 401k) makes sense. However, the default IRA provider is likely not the best one for you. Open an IRA at Fidelity instead and have them roll the money there.
Roll it over into a Fidelity IRA.