Navigating the world of retirement accounts can sometimes feel like trying to decipher an ancient scroll, especially when it comes to closing an account. If you're looking to close your Empower 401(k) account online, you're in the right place! This comprehensive guide will walk you through each step, ensuring you're well-equipped to manage your retirement savings effectively.
Is It Time to Untangle Your 401(k)? Let's Get Started!
Before we dive into the "how-to," let's consider why you might be looking to close your Empower 401(k). Are you changing jobs and want to consolidate your retirement funds? Are you nearing retirement and ready to access your savings? Or perhaps you've faced an unexpected financial hardship? Understanding your motivation will help you choose the best course of action. Keep in mind that "closing" a 401(k) often means distributing the funds, which can take several forms, such as a rollover, a direct withdrawal (cashing out), or even a combination.
Let's begin this journey to simplify your financial life!
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| How To Close Empower 401k Account Online |
The Definitive Guide to Closing Your Empower 401(k) Account Online
Closing a 401(k) account isn't quite like closing a regular bank account. It involves understanding various distribution options, tax implications, and potential penalties. Empower, as a major retirement plan provider, offers several ways to manage your account, but the online closure process will primarily revolve around initiating a distribution.
Step 1: Access Your Empower Account and Understand Your Options
The very first step is to log in to your Empower account. Don't underestimate the importance of this step – it's where you'll find personalized information about your specific 401(k) plan.
Log In Securely: Go to the Empower Retirement website (often through your former employer's benefits portal if applicable) and log in using your credentials. If you've forgotten your login information, use the "Forgot Username" or "Forgot Password" links to regain access.
Navigate to Your 401(k) Account: Once logged in, locate your 401(k) account from your dashboard or portfolio summary. You might have multiple accounts, so ensure you select the correct one.
Explore Distribution Options: Within your 401(k) account, look for sections related to "Distributions," "Withdrawals," "Rollovers," or "Leaving Your Employer." Empower's interface is generally user-friendly, but the exact phrasing may vary slightly. This section will outline the options available to you, which typically include:
Leaving funds in the plan: If your balance is above a certain threshold (often $5,000), you might be able to simply leave your money in your former employer's plan.
Rolling over to an IRA: This is a popular option for maintaining tax-deferred growth and gaining more control over investments.
Rolling over to a new employer's 401(k): If your new employer offers a 401(k) and allows rollovers, this can consolidate your retirement savings.
Cashing out (lump-sum distribution): This means taking the money as a direct payout. Be extremely cautious with this option, especially if you're under 59½, due to significant tax implications and penalties.
Hardship withdrawal: For immediate and heavy financial needs, though these are typically subject to taxes and penalties.
Step 2: Determine Your Best Distribution Strategy
Tip: Remember, the small details add value.
This is a critical decision point. The "best" way to "close" your Empower 401(k) depends entirely on your personal financial situation and goals.
Sub-heading: Understanding Rollovers
A rollover is generally the most recommended option when you leave an employer. It allows your money to continue growing tax-deferred (or tax-free in a Roth account).
Direct Rollover (Recommended): In a direct rollover, Empower sends your funds directly to your new IRA or new employer's 401(k). This is the smoothest option, as no taxes are withheld, and you avoid the 60-day deadline.
Indirect Rollover (Use with Caution): With an indirect rollover, Empower sends the check to you. You then have 60 days to deposit the full amount (including any 20% federal tax withholding) into a new qualified retirement account. If you miss this deadline, the distribution becomes taxable income, and you may face a 10% early withdrawal penalty if you're under 59½. Empower will typically withhold 20% for federal taxes in an indirect rollover, so you'll need to make up that 20% from other funds to roll over the full amount.
Sub-heading: Considering Cashing Out
Cashing out your 401(k) should generally be a last resort, especially if you are not yet 59½.
Tax Implications: Withdrawals from a traditional 401(k) are taxed as ordinary income.
10% Early Withdrawal Penalty: If you are under 59½, you'll generally incur an additional 10% IRS penalty on top of your regular income taxes. There are specific exceptions (e.g., total and permanent disability, certain medical expenses, separation from service at age 55 or older), but these are limited.
Loss of Future Growth: Cashing out means losing out on the power of compound interest for years, potentially impacting your retirement security.
Step 3: Initiate the Online Distribution Request
Once you've decided on your distribution strategy, you can initiate the request through Empower's online portal.
Locate the "Withdrawal" or "Rollover" Section: Within your 401(k) account, you should find a clear option to start a distribution.
Follow the Prompts: Empower's online system will guide you through the process. You will need to provide information such as:
Reason for distribution: (e.g., job change, retirement, hardship).
Type of distribution: (e.g., direct rollover, indirect rollover, lump sum).
Recipient account details: If rolling over, you'll need the name of the new financial institution, the new account number, and potentially their routing information. For a direct rollover, Empower will typically send the funds directly to the new custodian.
Tax withholding elections: For direct withdrawals, you'll specify federal and state tax withholding.
Review and Confirm: Carefully review all the information you've entered before submitting. Mistakes can lead to delays or unintended tax consequences.
Electronic Signatures/Consent: Many processes can be completed with electronic signatures. Be prepared to provide any required consents.
Step 4: Provide Required Documentation (If Applicable)
Tip: Don’t just scroll to the end — the middle counts too.
Depending on your distribution type and your employer's specific plan rules, you may need to provide additional documentation.
Spousal Consent: If you are married, your spouse may be required to consent to the distribution, especially for certain payout options. This often involves a notarized signature. Empower will provide the necessary forms if this applies to your plan.
Hardship Documentation: For hardship withdrawals, you'll need to provide proof of the financial hardship (e.g., medical bills, eviction notices). Empower has "Safe Harbor" reasons for hardship withdrawals and may offer self-certification or require summary information.
Rollover Instructions from New Custodian: If you're rolling over to a new IRA or 401(k), the new institution might provide specific instructions or forms that Empower requires.
Step 5: Track Your Request and Follow Up
After submitting your online request, it's essential to track its progress.
Confirmation Email/Message: Empower usually sends a confirmation email or provides a message in your online portal confirming receipt of your request.
Processing Time: Distribution requests can take anywhere from a few business days to a couple of weeks to process, depending on the complexity and any required approvals (e.g., from your former employer's plan administrator).
Check Your Empower Account: Periodically log in to your Empower account to check the status of your distribution.
Contact Empower if Needed: If you notice any delays or have questions, don't hesitate to contact Empower's customer service. Their contact numbers are usually available on their website under "Contact Us" or within your account. For corporate 401(k) plans, you can call (800) 338-4015. For government, healthcare, or education plans, call (800) 701-8255.
Important Considerations Before Closing Your Empower 401(k)
Vesting Schedule: Ensure you understand your vesting schedule for employer contributions. You are only entitled to the vested portion of your account.
Outstanding Loans: If you have an outstanding 401(k) loan, you will typically need to repay it in full before closing your account. If you don't, the outstanding balance may be treated as a taxable distribution and subject to penalties.
Required Minimum Distributions (RMDs): If you are 73 or older (or 75 for those born in 1960 and after), you may be subject to RMDs. Ensure you've taken any necessary RMDs for the current year before initiating a full distribution.
Financial Advisor Consultation: For complex situations, significant balances, or if you're unsure about the best strategy, consulting a qualified financial advisor is highly recommended. They can help you navigate the tax implications and make informed decisions for your long-term financial health.
10 Related FAQ Questions: How to...
Here are some quick answers to common questions about managing your Empower 401(k):
How to Find My Empower 401(k) Account Number?
Your account number is usually visible on your online account dashboard after logging in, on your account statements, or by contacting Empower customer service.
QuickTip: Repetition signals what matters most.
How to Roll Over My Empower 401(k) to an IRA?
Log in to your Empower account, navigate to the "Distributions" or "Rollover" section, and select the option for a direct rollover to an IRA. You'll need the receiving IRA custodian's details.
How to Withdraw Money from My Empower 401(k) for Hardship?
Access the "Hardship Withdrawal" section in your online account. You'll need to confirm your eligibility based on IRS-defined hardship reasons and may need to provide supporting documentation.
How to Contact Empower for 401(k) Support?
You can contact Empower customer service by phone. For corporate 401(k) plans, call (800) 338-4015. For government, healthcare, or education plans, call (800) 701-8255. Online chat or secure messaging might also be available through your portal.
How to Change My Beneficiary on My Empower 401(k)?
Log in to your Empower account, navigate to your 401(k) plan, and look for a "Beneficiaries" or "My Profile" section. You can typically update beneficiary information online.
QuickTip: Revisit key lines for better recall.
How to Understand the Fees for Early Withdrawal from Empower 401(k)?
If you withdraw before age 59½ (and don't qualify for an exception), you'll face your ordinary income tax rate on the distribution, plus a 10% federal early withdrawal penalty. State income taxes may also apply.
How to See My Vesting Schedule for Employer Contributions on Empower?
Your vesting schedule should be outlined in your plan documents, accessible through your Empower online account, or by contacting Empower or your former employer's HR/benefits department.
How to Take a Loan from My Empower 401(k)?
If your plan allows, you can typically apply for a 401(k) loan through your Empower online account. This involves specific terms, limits (usually 50% of your vested balance up to $50,000), and repayment schedules.
How to Know if My Empower 401(k) Balance is Too Small to Leave in the Plan?
Many plans have a "force-out" threshold (often $1,000 or $5,000). If your balance falls below this, the plan administrator may automatically roll it over into an IRA or issue a check. Check your plan's Summary Plan Description (SPD) or contact Empower.
How to Get Tax Documents for My Empower 401(k) Withdrawal?
Empower will issue a Form 1099-R for any taxable distributions from your 401(k). This form will be available in your online document center and mailed to your address of record, usually by late January of the following year.
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