Involuntary Cash-Out

AAA

DEFINITION of 'Involuntary Cash-Out'

Distributing the balance of a participant's retirement account under a qualified plan without the written consent of the participant, the participant's spouse or beneficiary.

INVESTOPEDIA EXPLAINS 'Involuntary Cash-Out'

Involuntary cash-out usually occurs if the participant's balance is no more than $5,000 and he or she is either no longer employed by the employer sponsoring the qualified plan, or has died. Effective Mar 28, 2005, a qualified plan must ensure either that cash-out balances between $1,000 and $5,000 are rolled to a Traditional IRA (by means of an automatic rollover), or that cash-outs will not occur if the participant's balance is more than $1,000.

RELATED TERMS
  1. Vesting

    The process by which employees accrue non-forfeitable rights ...
  2. Qualified Retirement Plan

    A plan that meets requirements of the Internal Revenue Code and ...
  3. Traditional IRA

    An individual retirement account (IRA) that allows individuals ...
  4. Rollover

    A rollover is when you do the following: 1. Reinvest funds from ...
  5. Distribution

    1. When trading volume is higher than that of the previous day ...
  6. Automatic Rollover

    1. The transfer of qualified retirement plan distributions into ...
Related Articles
  1. Business Owners: Rules For Qualified ...
    Entrepreneurship

    Business Owners: Rules For Qualified ...

  2. 10 Common Retirement Planning Mistakes ...
    Retirement

    10 Common Retirement Planning Mistakes ...

  3. 7 Steps To Evaluate A Financial Adviser
    Investing Basics

    7 Steps To Evaluate A Financial Adviser

  4. 6 Retirement Planning Tips For Late ...
    Retirement

    6 Retirement Planning Tips For Late ...

comments powered by Disqus
Hot Definitions
  1. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
  2. Ratio Analysis

    Quantitative analysis of information contained in a company’s financial statements. Ratio analysis is based on line items ...
  3. Days Payable Outstanding - DPO

    A company's average payable period. Calculated as: ending accounts payable / (cost of sales/number of days).
  4. Net Sales

    The amount of sales generated by a company after the deduction of returns, allowances for damaged or missing goods and any ...
  5. Over The Counter

    A security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, etc. The phrase "over-the-counter" ...
  6. Earnings Before Interest After Taxes - EBIAT

    A financial measure that is an indicator of a company's operating performance. EBIAT, which is equivalent to after-tax EBIT ...
Trading Center