401(k) - Time Limit For Issuing a Withdrawal?

Q. I've asked my ex-employer for a withdrawal from my 401k and have acknowledged the tax ramifications. The problem is that the company is saying that they are changing administrators and will not be able to give me a check for at least 2 months. Is that legal? Is there a time limit on issuing rollover or withdrawal requests?

A. It is not uncommon for the assets of a 401(k) plan to be frozen during a custodian change because it is too difficult to process requests during that time. I don't have any idea about the laws regarding this, but imagine that it is governed more by the plan document.

This is one reason why it is normally best to transfer money out of a 401(k) and into in IRA as soon as possible after separation from service.

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