What happens to my 401(k) when my practice is sold?

That's decided between the practice, which sponsors the plan, and the buyer. The plan may be ended before closing, or kept going by the new owner. If you work at the practice, HR or the plan administrator can tell you which, and when.

If the plan ends, the IRS says the money is generally paid out as soon as it's practical, usually within a year. Leaving it where it is stops being an option, so you'll be choosing where it goes next.

If you own the practice and are deciding what happens to the plan itself, that's a question for the business, your attorney and the plan provider. How do I switch 401(k) providers? covers the sponsor's side.

Vesting is the schedule that decides when the employer's contributions, such as the match, become fully yours. If the plan ends, the IRS requires everyone in it to become 100% vested straight away. In a 401(k), that means the match and any profit-sharing money vest whatever the plan's schedule says.

If the plan carries on and you leave, ask what happens to any match that hasn't vested yet. The IRS also describes a partial termination, which can happen when a substantial portion of the people in a plan (usually 20% or more) lose their jobs, for example when an employer closes a site. People affected by it have the same rights as if the plan had ended. Whether that applies to your sale is a question for the plan.

Ask the plan whether the loan has to be repaid when the plan ends or when you leave, and by what date. If it isn't repaid, the loan can be paid off out of your balance instead, and that amount can count as taxable income.

If the payoff counts as a qualified plan loan offset, the IRS gives you until the due date of that year's tax return, including extensions, to put the same amount into an IRA or another plan. Ask the plan which applies to you, and tell your accountant.

Generally into your new employer's plan, into an IRA, or out to you as cash, which is taxed. If the old plan carries on, you may also be able to leave it there. Two things to check first:

• Your new plan doesn't have to take it. The IRS says a plan isn't required to accept rollovers, so ask the new plan's administrator whether it does, and which kinds of money.
• If you don't choose, the plan may choose for you. After you've left, a plan can move a small balance into an IRA in your name, or pay a very small one out to you, without asking.

Each choice has its own costs, investment menu and rules. If you move the money to an IRA we advise, we're paid our advisory fee on it, so ask us how that compares with leaving it in a plan.

The plan has to give you a written explanation of your rollover options. Read it for the difference between these three ways out:

On the middle route, the 20% matters. To roll over the full balance, you have to make up the withheld amount from other money within the 60 days. Whatever you don't replace is treated as paid out to you, and taxed.

Money you take out of a 401(k) before age 59 and a half generally carries a 10% additional tax on top of income tax. Money you roll over doesn't.

There are exceptions. The IRS list includes payments after you leave an employer at age 55 or older, and disability. Your accountant can tell you whether one fits.

The plan administrator and the account receiving the money carry out the rollover. Your accountant reports it on your return. We advise on where the money fits in your plan and coordinate with your accountant and the plan provider, so the paperwork says what you meant it to.

The sale brings more than the 401(k). My practice is being sold. What happens to my money?