How secure is my 403(b)? Can its assets be “raided”?
The simple answer is that with the defined contribution plan: 401k, 403b, 457 and the US government TSP; the employer doesn't hold on to the funds. When they take your money from your paycheck there is a period of a few days or at the most a few weeks before they must turn the money over to the trustee running the program. If they are matching your contributions they must do the same with those funds.  The risk is in that window of time between payday and deposit day. If the business folds, or enters bankruptcy protection, or decides to slash what they will contribute to the match in the future anything already sent to the trustee is out of their clutches. In the other hand a defined a benefit plan or pension plan: where you get X percent of your highest salary times the number of years you worked; is not protected from the company. These plans work by the company putting aide money each year based on a formula. The formula is complex because they know from history some employees never stick around long enough to get the pension.  The money in a pension is invested outside the company but it is not out of the control of the company. Generally with a well run company they invest wisely but safely because if the value goes up due to interest or a rising stock market, the next year their required contribution is smaller. The formula also expects that they will not go out of business. The problems occur when they don't have the money to afford to make the contribution. Even governments have looked for relief in this area by skipping a deposit or delaying a deposit.  There is some good news in this area because a pension program has to pay an annual insurance premium to The Pension Benefit Guaranty Corporation a quai-government agency of the federal government. If the business folds the PBGC steps in to protect the rights of the employees. They don't get all they were promised, but they do get a lot of it.  None of those pension issues relate to the 401K like program. Once the money is transferred to the trustee the company has no control over the funds. "I assume you get your information from somewhere where they don't report the truth. I'm sorry if mentioning Fox News offended you, it was not my intention. But the way the question is phrased suggests that you know nothing about what ""pension"" means. So let me explain. 403(b) is not a pension account. Pension account is generally a ""defined benefit"" account, whereas 403(b)/401(k) and similar - are ""defined contribution"" accounts. The difference is significant: for pensions, the employer committed on certain amount to be paid out at retirement (the defined benefit) regardless of how much the employee/employer contributed or how well the account performed. This makes such an arrangement a liability. An obligation to pay. In other words - debt. Defined contribution on the other hand doesn't create such a liability, since the employer is only committed for the match, which is paid currently. What happens to your account after the employer deposited the defined contribution (the match) - is your problem. You manage it to the best of your abilities and whatever you have there when you retire - is yours, the employer doesn't owe you anything. Here's the problem with pensions: many employers promised the defined benefit, but didn't do anything about actually having money to pay. As mentioned, such a pension is essentially a debt, and the retiree is a debt holder. What happens when employer cannot pay its debts? Employer goes bankrupt. And when bankrupt - debtors are paid only part of what they were owed, and that includes the retirees. There's no-one raiding pensions. No-one goes to the bank with a gun and demands ""give me the pension money"". What happened was that the employers just didn't fund the pensions. They promised to pay - but didn't set aside any money, or set aside not enough. Instead, they spent it on something else, and when the time came that the retirees wanted their money - they didn't have any. That's what happened in Detroit, and in many other places. 403(b) is in fact the solution to this problem. Instead of defined benefit - the employers commit on defined contribution, and after that - it's your problem, not theirs, to have enough when you're retired."
"Your 401K (and IRA) is a legally distinct entity from yourself. In fact, it is a ""trust,"" and your Administrator is a ""trustee,"" while you are both creator and benefactor. This fact, and the 10% early withdrawal penalty, makes it immune from most judgments. The IRS can ""levy"" your 401K or IRA for back taxes, but must waive the 10% penalty (under the 1997 Tax Reform law). That gives them the power to do what most others can't. A ""tricky"" banker may persuade you to take money out of your 401K to pay the bank. If you do, s/he has won. But s/he can't go after your 401k." "Hah!  Edit: to elaborate, markets are closed. Unless your firm made a bunch of moves before EOD Friday, there's very little they can do to avoid the bloodshed (if there is any after the vote on Sunday) come Monday morning. Not to mention most 401k funds have contractual limits placed on them in terms of how much they can do in terms of buy/sell actions in a given window of time - usually that's a good protection, however in ""outlier"" occurrences it's a really, really bad thing.  Now, if you're in it for the long haul (in your 20s-early 30s) it's no big deal (yes, you'd be better off in a panic if you divested, but short-term drops are somewhat built into the long-term model). If you're about to retire I'd be really, really nervous." It's odd to me that they manage their own pensions closely enough to divest of anything and that they'd have been invested in private prisons enough to have anything to get rid of.   I'm also not sure that I'd feel better as a NYC pensioner knowing that my retirement fund is becoming politicized. In this case it's probably a good thing, but in the future who knows. Everything here is yours and can be rolled into your new plan or IRA. You can generally move your 403(b) assets into your traditional IRA or into your new employer's plans, assuming your new employer's plan allowing incoming roll overs.  You can probably roll your pension out as well. Actually, the right person to ask about this is the company with whom you have your IRA.  The easiest and best way to get assets from one tax-sheltered account to another is by contacting the company you want to roll INTO and having them take care of everything for you. "Does your job give you access to ""confidential information"", such that you can only buy or sell shares in the company during certain windows?  Employees with access to company financial data, resource planning databases, or customer databases are often only allowed to trade in company securities (or derivatives thereof) during certain ""windows"" a few days after the company releases its quarterly earnings reports.  Even those windows can be cancelled if a major event is about to be announced.  These windows are designed to prevent the appearance of insider trading, which is a serious crime in the United States. Is there a minimum time that you would need to hold the stock, before you are allowed to sell it?  Do you have confidence that the stock would retain most of its value, long enough that your profits are long-term capital gains instead of short-term capital gains? What happens to your stock if you lose your job, retire, or go to another company? Does your company's stock price seem to be inflated by any of these factors: If any of these nine warning flags are the case, I would think carefully before investing. If I had a basic emergency fund set aside and none of the nine warning flags are present, or if I had a solid emergency fund and the company seemed likely to continue to justify its stock price for several years, I would seriously consider taking full advantage of the stock purchase plan.  I would not invest more money than I could afford to lose. At first, I would cash out my profits quickly (either as quickly as allowed, or as quickly as lets me minimize my capital gains taxes).  I would reinvest in more shares, until I could afford to buy as many shares as the company would allow me to buy at the discount. In the long-run, I would avoid having more than one-third of my net worth in any single investment.  (E.g., company stock, home equity, bonds in general, et cetera.)" "A well diversified retirement portfolio is going to have some component in cash or near-liquid investments. So I tend to put it all in one place knowing that I can draw on it (at least from the ROTH account) in the event of an emergency.  Obviously, you don't want to do this very often, but hopefully emergencies don't happen often either. You also have to attenuate your idea of an emergency so that it doesn't mean ""I didn't get a bonus check this year and can't afford gifts for the kids as nice as last year!""" Asset protection is broad subject. In your examples it is certainly possible to have accounts that exist undisclosed from a spouse and legally inaccessible by said spouse. In the US, balances in 401k retirement accounts are exempt from forfeitures in bankruptcy. The only trick to secret stashes is that it involves you having any wealth in the first place, that you don't need to access. It is more worth it, for most people, to use all of their access to wealth to get out of debt, earn claims to property, and save for retirement. This takes up all of their earnings, making hidden wealth of any significant portion to be an impractical pipe dream. But with trust laws, corporate laws, and marriage property laws being different in practically every jurisdiction, there is plenty of flexibility to construct the form of your secret wealth.  Cryptocurrency makes it much easier, at the expense of net asset value volatility. For such a small amount, I really don't think it's worth the time and effort to withdraw it. Why not roll it over into a traditional IRA or a new 401k / 403b? I said I knew about FEIE. So what happens when you want to open a private tax-deferred pension that is common in most industrialized countries? Now you have capital gains that are not taxed. Uh oh. Oh, you want to work for yourself, have fun paying US social security even though you may never actually receive any benefit and aren't providing anything to the US, oh and that income not being counted in the FEIE. Oh you made a mistake on reporting your retirement account, the US government is now authorized to penalize you 40% of the balance of your retirement savings. That's great that you found an organization that says IRS won't use it for now, but who knows how long that will last.  But things like retirement savings and working for yourself must only be for crazy rich people, right? "is it worth it? That is for you to judge. The risks are having it blowup in your face, and you having to pay a penalty, or go to jail. The issue is how you keep it secret, and who you keep it secret from. If you have money in a secret account and keep it hidden even though you: You are taking a big risk. If the knowledge of the contents of the secret stash would cause a judge or government agency to make a different decision, you could face penalties ranging from monetary to jail time. The government could also decide that they need to determine the source of the funds. They may want to know if the money was ""earned"" through illegal means. They will want to determine if the funds should haven taxed not just on the interest but if the original income tax was ever collected.  If the amounts are large enough the taxing authority  and police will have a lot of fun pulling apart your entire financial history. Oh and the lawyers you pay to keep you out of jail will also have their fun. why do some people do it? They are greedy; or paranoid; or they don't trust others; or they are criminals." Kudos to you on having money in a retirement account as early as after college.  Many people don't start investing towards retirement until far to late and compound interest makes a major difference in those early years. Ideally, neither withdraw nor borrow from these accounts.  Withdrawing from your 403b will incur a 10% penalty unless you are over the minimum age on top of the normal tax on that income.  With a 401K loan you're putting yourself at risk if you run into a situation where you can't pay the loan back of incurring the same penalties as an early withdrawal.  This article covers the concerns well. In general, you want to view your retirement money as untouchable until the distributions need to start coming in retirement.  It's your future in there. Of course, this doesn't help the short term cash need.  Do you have money in an emergency fund somewhere?  Could a relative loan you money?  Can you move to a less expensive place in advance and squirrel away some of what would have been your rent cash?  Can you cut back to bare necessities and do the same?  Do you have some nice stuff sitting around that you could sell to make up that needed cash?  Will your current employer pay out unused vacation or are you getting any severance from this situation?  Will you qualify for unemployment? I other words, think about what you would do to get the money if your retirement accounts weren't there.  Then do that - as long as it's legal and doesn't involve running up debt on high interest lines of credit - instead of borrowing against your future. There are API libraries available to various banks in various programming languages. For example, in Perl there are many libraries in the Finance::Bank:: namespace. Some of these use screen-scraping libraries and talk to the GUI underneath, so they are vulnerable to any changes the bank makes to their interface, but some of the better banks do seem to provide back-end interfaces, which can then be used directly. In either case, you should still be sure that the transactions are secure. Some bank sites have appallingly bad security. :( A good place to start is to call your bank and ask if they offer any programming APIs for accessing their back end. The biggest thing for me still is how they knew 2 months prior to publicly releasing the information that they had been massively breached. And what did they do? Well, they cashed out their stocks and decided to wait a whole 2 months. I will be surprised if they get fined or even jail time though. Too big to imprison. It's an infosec rule at my 200 person software company that really doesn't have much of a security risk (i.e. no one would gain much by getting into our records). If it wasn't a rule at equifax, at least on paper, I'll eat my hat or a dictionary or something.  To be clear, I'm not claiming I know this, I'm just basing it on experience working in smaller tech companies. And let's put it this way... the failings of big companies are very rarely a *lack* of rules and bureaucracy. "403b plans are used by school districts, colleges and universities, nonprofit hospitals, charitable foundations and the like for their employees while 401k plans are used by most everybody else. I would suspect that a school district etc can use a 401k plan instead of a 403b plan if it chooses to do so, but the reverse direction is most likely forbidden: a (for-profit) company cannot use a 403b plan. One difference between a 403b plan and a 401k plan is that the employer can choose to offer, and the employee can choose to purchase, stock in the company inside the 401k plan. This option obviously is not available to charities etc. which don't issue stock. Your comment that the 403b plan invests solely in (variable) annuities suggests that the plan administrator is an insurance company  and that the employer is moving to more ""modern"" version that allows investments in mutual funds and the like. Forty years ago, my 403b plan was like that; the only investment choice was an annuity, but some time in the 1980s, the investment choices were broadened to include mutual funds (possibly because the 1986 Tax Reform Act changed the rules governing 403b plans).  So, are you sure that your employer is changing from a 403b plan to a 401k plan, or is it just a change of 403b plan administrator from the insurance company to another administrator who offers investment choices other than an annuity? Note, of course, that insurance companies have changed their options too. For example, TIAA (the Teachers' Insurance and Annuity Association) which was the 403b plan administrator for many schools and colleges became TIAA/CREF (College Retirement Equities Fund) where the CREF mutual funds actually were pretty good investments."