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Note
title60 Days to Rollover

Once Principal Financial Group has been notified of your exiting employment with Reliant, you will generally have a 60 day window to select what you would like Principal to do with your 401(k) balance. 

You have 3 Options: Roll it Over, Stay with Principal, Cash it out.   

If you do not make a selection in that 60 day window Principal will do one of 2 things:

  • If the balance in the 401K account is greater than $2,000 - Principal will automatically roll your 401K account into an IRA account with Principal 
  • If the balance in the 401K account is less than $2,000 - Principal will generally cut you a distribution check for the balance in the account, minus a reserve of taxes, in this scenario you will receive a 1099 from Principal at the end of the year and will have to report the distribution on your taxes.  This option comes with a tax penalty for early withdrawal of retirement funds, so you do NOT have to cash this check.  *see below for details.

 

When you exit employment with Reliant your 401(k) will be 100% vested, which means you get to keep all of the money you invested, plus 100% of the employer match. 

Here are some things to consider:

Warning
titleParsonage Option for Withdrawals
  • If you want to take advantage of the option to withdraw retirement funds as Parsonage in the future - please read Withdrawal as Parsonage (Age 59 1/2 or Older )and follow the steps on that page to ensure you will be eligible for that benefit in the future. 

Roll It Over

  • A Direct Rollover into another Retirement Account has no tax consequences
  • Rollovers can be processed online through the "Distributions" tab or Principal's Client Contact Center 1-800-547-7754 can mail them (sometimes email or fax them) to you 
  • All your money stays in one place, so it's easier to track as well as to know how much you have set aside for retirement

Stay with Principal (IRA)

  • No tax consequences (the money stays in an approved retirement vehicle so you won't incur early withdrawal penalties or be issued a 1099)
  • Options to add money (up to annual IRA limits) 
  • Continued service from Principal Financial Group
  • Some fees may apply

Cash Out

  • You will pay a tax penalty for early withdrawal if you are not at least age 59 1/2
  • Retirement savings for the future are forfeited when you cash out the 401(k)
Tip
titlePrincipal Client Contact Center
The Principal Client Contact Center 1-800-547-7754 can advise you of your options.  They are available Monday-Friday from 7:00am eastrn time to 9:00pm Eastern time.  You can also review the "Ddistributions" tab of your online account at Principal.com.  The Distributions tab will be available as soon as Reliant notifies Principal of your termination.  This usually occurs within 10 days of your final paycheck.  (If you'd like to have us notify Principal of your Termination sooner  - please contact Barb Seckler at 407-671-9700 ext 108).