Ready to take control of your Voya 401(k) and explore your options? Whether you're looking to stop contributions, withdraw funds, or roll over your account, this comprehensive guide will walk you through each step. It's essential to understand that while opting out might seem straightforward, there are important implications regarding taxes, penalties, and your long-term retirement savings. So, let's dive in!
How to Opt Out of Your Voya 401(k): A Step-by-Step Guide
Deciding to opt out of your 401(k) is a significant financial decision. It's crucial to understand the implications before you proceed. This guide primarily focuses on stopping contributions to your Voya 401(k). If you are looking to withdraw or roll over funds, those steps will be covered later in this post.
Step 1: Understand Your "Why" and Check Your Plan Documents
Before you do anything, take a moment to consider why you want to opt out of your Voya 401(k). Are you facing a financial hardship? Do you have a better investment opportunity? Are you leaving your employer? Your reason will dictate the best course of action.
Now, here's your first interactive task! Think about your primary reason for considering opting out. Write it down. This will help you stay focused as you navigate the process.
Once you have your "why," the very next thing you should do is locate and review your specific Voya 401(k) plan documents. These documents, often called a Summary Plan Description (SPD), will outline the specific rules, eligibility requirements, and procedures for your employer's plan. Every 401(k) plan can have slightly different rules, so what applies to one Voya plan might not apply to another. Look for sections on:
Contribution changes: How to stop or modify your contributions.
Withdrawal options: Under what circumstances you can withdraw funds (e.g., age 59½, hardship, termination).
Rollover rules: How to transfer your funds to another retirement account.
Contact information: Who to call at Voya or your plan administrator.
You can usually find these documents by logging into your Voya account online or by contacting your employer's HR or benefits department.
Step 2: Accessing Your Voya 401(k) Account Online
The most common and often easiest way to manage your Voya 401(k) is through their online portal.
Go to the Voya Website: Navigate to the Voya Financial website (
www.voya.com Log In: Enter your username and password. If you're a first-time user, you'll need to register for an account. If you've forgotten your credentials, look for links like "Forgot Username" or "Forgot Password" to reset them.
Navigate to Your Dashboard: Once logged in, you should see a dashboard or homepage displaying your account summary.
Step 3: Stopping Future 401(k) Contributions
This is the primary action for "opting out" in the sense of stopping new money from going into your Voya 401(k).
Sub-heading 3.1: Locating the Contribution Change Section
On your Voya account dashboard, look for sections related to "Contributions," "Savings," "My Options," or "Manage Contributions." The exact wording might vary slightly depending on your plan's interface.
You might see an option like "Explore My Options" or a direct link to "Manage Contributions."
Sub-heading 3.2: Initiating the Contribution Change
Click on the relevant link. You'll likely be presented with options to change your contribution rate, including setting it to 0%.
Select the option that allows you to stop or reduce your contributions. This might be a "Select" button in a "I don't want to save" box, or a field where you can enter a new contribution percentage.
Carefully review the changes you are making. Ensure you are setting your contribution to the desired amount (e.g., 0% if you want to stop entirely).
Confirm and Save: Follow the on-screen instructions to confirm and save your changes. You should receive a confirmation message or email.
Sub-heading 3.3: Understanding the Effective Date
Be aware that changes to your contributions are not always immediate. They typically take effect with the next payroll cycle or a specific future date. Your employer's payroll department needs time to process the change.
Verify the effective date of your contribution change. This information should be displayed during the process or in your confirmation.
Step 4: Understanding Withdrawal Options (If Applicable)
Simply stopping contributions means no new money goes in, but your existing balance remains invested. If you want to access the funds, you'll be looking at a withdrawal or rollover. Withdrawing funds from a 401(k) while still employed or before retirement age (typically 59½) comes with significant tax implications and potential penalties.
Sub-heading 4.1: Types of Withdrawals While Employed
Voya 401(k) plans typically offer limited withdrawal options while you are still employed:
Age 59½ Withdrawals: If you are 59½ or older, you may be able to withdraw funds for any reason. These withdrawals are subject to ordinary income tax but generally not the 10% early withdrawal penalty.
Hardship Withdrawals: These are typically allowed for specific, severe financial emergencies as defined by the IRS. Common reasons include:
Unreimbursed medical expenses.
Costs related to the purchase of a primary residence.
Tuition, related educational fees, and room and board expenses for post-secondary education.
Payments necessary to prevent eviction from or foreclosure on your primary residence.
Burial or funeral expenses.
Expenses for the repair of damage to your principal residence that would qualify as a deductible casualty expense.
Be prepared to provide substantial documentation to prove your hardship. These withdrawals are subject to ordinary income tax and often a 10% early withdrawal penalty (unless an exception applies).
In-Service Withdrawals (De Minimis or Rollover): Some plans may allow a one-time withdrawal of a small account balance (e.g., under $5,000) if you haven't contributed for a certain period. You might also be able to withdraw funds that were previously rolled into your Voya 401(k) from another retirement plan.
Sub-heading 4.2: The Withdrawal Process
Log in to your Voya account.
Look for "Withdrawals" or "Loans & Withdrawals" under your account options.
Select the appropriate withdrawal type (e.g., Hardship, Age 59½).
Complete the application: This will typically involve providing a reason, the amount, and selecting your tax withholding preferences. Be aware that 20% federal tax withholding is often mandatory for eligible rollover distributions, even if you intend to roll it over later. For hardship withdrawals, you can typically choose voluntary withholding.
Submit required documentation: Especially for hardship withdrawals, you'll need to upload or mail supporting documents.
Review and confirm: Double-check all information before submitting.
Sub-heading 4.3: Tax Implications and Penalties of Early Withdrawals
Ordinary Income Tax: All pre-tax contributions and earnings you withdraw from a 401(k) are subject to your ordinary income tax rate.
10% Early Withdrawal Penalty: If you are under age 59½ and do not qualify for an IRS exception (such as disability, certain medical expenses, or separation from service in the year you turn 55 or later), you will likely incur a 10% penalty on the withdrawn amount.
State and Local Taxes: Depending on your state of residence, you may also owe state and local income taxes on the withdrawal.
Consult a tax advisor: It is highly recommended that you speak with a qualified tax professional before making any withdrawals to understand the full impact on your financial situation.
Step 5: Exploring Rollover Options (If You've Left Your Employer)
If you've left your employer, or your employer terminates the plan, you'll have more flexibility regarding your Voya 401(k) balance. Instead of withdrawing, a rollover is generally the most tax-efficient option.
Sub-heading 5.1: Understanding Rollovers
A rollover involves moving your 401(k) funds to another qualified retirement account without incurring immediate taxes or penalties. Common rollover options include:
Rollover to a New Employer's 401(k) or 403(b) Plan: If your new employer offers a retirement plan, you can typically roll your Voya 401(k) balance into it.
Rollover to an Individual Retirement Account (IRA): This is a popular option as it gives you more control over your investments. You can roll it into a Traditional IRA (tax-deferred) or a Roth IRA (tax-free in retirement, but you'll pay taxes on the rollover amount now).
Direct Rollover vs. Indirect Rollover:
Direct Rollover (recommended): Funds are moved directly from Voya to your new retirement account. This avoids the 20% mandatory federal tax withholding.
Indirect Rollover: Voya sends you a check, and you have 60 days to deposit it into your new retirement account. If you fail to do so within 60 days, the amount becomes a taxable withdrawal subject to taxes and penalties. Voya is also required to withhold 20% of the funds, which you'd have to make up from other sources to roll over the full amount.
Sub-heading 5.2: The Rollover Process
Open a new retirement account: If you don't already have one, open a new 401(k) (with your new employer, if permitted) or an IRA (with a brokerage firm, bank, or mutual fund company).
Contact Voya: Log into your Voya account or call their Plan Service Center. You'll need to initiate a distribution request and specify it as a direct rollover.
Provide new account information: You'll need the receiving institution's name, account number, and often specific routing instructions for retirement plan rollovers.
Complete forms: Voya will likely require you to fill out distribution forms.
Monitor the transfer: Keep track of the process to ensure the funds are successfully transferred to your new account.
Step 6: Seeking Professional Advice
Navigating 401(k) options can be complex, especially with tax implications.
Consult a Financial Advisor: A financial advisor can help you understand your options, assess the long-term impact of your decision, and help you create a comprehensive financial plan.
Consult a Tax Professional: A tax advisor can explain the specific tax consequences of withdrawals or rollovers based on your individual circumstances.
10 Related FAQ Questions
Here are 10 frequently asked questions with quick answers about managing your Voya 401(k) account:
How to check my Voya 401(k) balance?
Log in to your Voya account online. Your account balance will typically be displayed prominently on your dashboard or homepage.
How to change my Voya 401(k) contributions?
Log in to your Voya account, navigate to the "Contributions" or "Manage Contributions" section, and follow the prompts to adjust your contribution percentage.
How to contact Voya 401(k) customer service?
You can typically find the customer service number by logging into your account or by visiting the "Contact Us" section on the Voya website. Common numbers include 1-855-646-7549 or 1-888-875-401K, but this can vary by plan.
How to get a hardship withdrawal from my Voya 401(k)?
Log in to your Voya account, go to the "Withdrawals" section, select "Hardship Withdrawal," and complete the application, providing all required documentation for your specific hardship reason.
How to roll over my Voya 401(k) to an IRA?
Open a Traditional or Roth IRA with a financial institution. Then, contact Voya (online or by phone) to initiate a direct rollover, providing them with the new IRA's details.
How to know if my Voya 401(k) is automatically enrolling me?
Your employer is required to send you notices about automatic enrollment before it occurs. Check your initial plan documents or contact your HR department.
How to avoid penalties when withdrawing from my Voya 401(k)?
Generally, to avoid the 10% early withdrawal penalty, you must be age 59½ or older, or qualify for a specific IRS exception (e.g., disability, certain medical expenses, or separation from service in the year you turn 55 or later). Rolling over funds directly to another qualified retirement account also avoids penalties.
How to update my beneficiary for my Voya 401(k)?
Log in to your Voya account online and look for a "Beneficiary" or "Profile" section where you can update your designated beneficiaries.
How to understand the fees in my Voya 401(k)?
Review your plan's Summary Plan Description (SPD) or prospectus, which should detail all administrative, investment management, and other fees associated with your 401(k) account. You can also typically find fee information within your online Voya account statements.
How to take a loan from my Voya 401(k)?
Log in to your Voya account and look for a "Loans" or "Loans & Withdrawals" section. Your plan must allow for loans, and there will be specific rules regarding the amount, repayment terms, and interest.