 TITLE: What Happens to Your 401(k) When Your Employer Goes Out of Business? CONTENT: What Options Do You Have for Your 401(k)?\n-----------------------------------------\nOnce you realize your employer is going out of business or being acquired, you should immediately contact your company's 401(k) administrator to stay in the loop about what's happening with your 401(k).\nIf your employer is bought or merges with another company, your 401(k) plan may change, NARPP says. Most likely, your 401(k) money will be automatically folded into the new company's employer-sponsored plan. If the new employer doesn't offer that option, however, you may need to seek out other avenues.\nIf your company is not bought but instead declares bankruptcy and closes its doors, you will not have the option to roll your funds over into a new 401(k) and will need to make a different choice.\nThese are the primary options if your 401(k) cannot be rolled over into a new employer's plan:\n*   **Keep your money in your current 401(k).** Because your plan is likely administered by a third-party investment firm, such as Fidelity or American Funds, you will probably have the option to keep your money where it is. While that may suffice while you deal with the bigger picture of your company going out of business—such as potentially having to find a new job—you may want to move your funds to an investment vehicle where you can begin making contributions for your retirement again.\n*   **Roll over the money into an IRA.** You'll have the choice of a traditional IRA or a Roth IRA. If you roll over your traditional 401(k) into a traditional IRA, you can do so tax-free. But if you roll over your traditional 401(k) into a Roth IRA, you'll owe taxes on the amount invested.\n*   **Withdraw the funds as a cash distribution.** This will trigger federal taxes and possible penalties and is generally discouraged. END