If you leave an employer before choosing what to do with your 401(k) funds, Gusto Retirement may open a force-out IRA for you automatically. Here’s how to claim that account and decide what to do with your funds.
A force-out IRA is an individual retirement account (IRA) opened on your behalf if you leave an employer and do not choose what to do with your 401(k) funds by a deadline.
If your former employer’s plan has a force-out provision, it can automatically roll your money into this new IRA when your balance falls below a certain threshold — typically between $1,000 and $7,000. This happens only if you do not give us instructions on where to move your funds before the deadline.
Note: The threshold does not include money rolled into your account from another plan or IRA.
Because you did not open this account yourself, it has limited features until you complete the claim process. Until you claim your account, you cannot make new contributions, change your investments, or start a rollover.
Claiming your account gives you full access to your funds and IRA features.
To claim your force-out IRA, choose the path that matches how you signed in, then follow the steps.
Sign in to Gusto and go to Benefits. Under Savings, find 401(k) and select View. Select Manage 401(k).
Go to the banner at the top of your dashboard and select Claim my IRA.
Follow the prompts to claim your account.
Sign in directly. Visit the Gusto Retirement sign-in page and sign in with your Gusto Retirement credentials, or use Gusto Single Sign-On (SSO). Learn more about SSO.
Go to the banner at the top of your dashboard and select Claim my IRA.
Follow the prompts to claim your account.
After you claim your account, you can choose one of these options:
If you keep your funds with Gusto Retirement, you can continue using the account as an IRA with full access to features, like contributions, investment changes, and inbound rollovers.
You can transfer or roll over your funds to another IRA or eligible retirement plan.
A trustee-to-trustee transfer or direct rollover is not a taxable event.
You can also withdraw your funds in cash.
Important: A cash distribution may be taxable, federal and state withholding may apply (typically at your direction), and if you’re under age 59½, you may owe an additional 10% early withdrawal tax unless an exception applies.
Note: We charge a monthly account fee on this account, whether or not you take action.
If you do not claim your assets, your state’s unclaimed property laws may eventually require Gusto Retirement to turn your funds over to the state. This timing varies by state. If that happens, you can recover your funds by contacting your state’s unclaimed property program.