I no longer work at this company!
If you no longer work for the company where the plan is held, then you have three basic options available to you. One thing to remember is that most plans require you to withdraw your full balance.
Cash out all the funds
You will pay taxes on all the money you take in cash, and if you are under age 55, you will also pay a 10% penalty for withdrawing before retirement age. The federal taxes (at a rate of 20%) is withheld at the time of you doing the withdrawal. Some US states (Arkansas, Delaware, DC, Iowa, Kansas, Maine, Maryland, Massachusetts, Nebraska, North Caroline, Oklahoma, Vermont and Virginia) require you pay estimated state income taxes at the time of withdrawal as well, and other states give you the option to pay estimated taxes at the time of withdrawal or to defer paying those taxes until when you file your tax return for that tax year. There will be a processing fee.
Rollover all the funds
If you want to keep these funds invested, and avoid the taxes and potential penalties, you can roll it over into another qualified plan, or an IRA. If you have a new job, confirm they have a retirement plan that will accept rollovers. If you don’t have an employer-based retirement option available to you, you can go to a financial Institution such as Vanguard or Fidelity, or your bank, and set up an IRA (individual retirement account) to receive the rollover. There are no taxes and no penalties when you do a direct rollover from plan to plan. There will be a processing fee.
Combination of the two
Maybe you could really use some extra cash but want to also keep some of the money in the plan for your retirement. You can move some money into a new qualified plan and take some in cash. You will pay taxes and any applicable penalties on only the money you take in cash. In this scenario, you will likely pay a processing fee for each distribution.
A final thing to be aware of when you have a plan with a former employer: Most plans allow an employer to “force out” former employees with smaller balances (sometimes “smaller” means under $1000 and sometimes it means under $5000.) Depending on the amount of funds, a check may be sent directly to you, or your funds may be rolled over into a designated rollover IRA. It is important that you keep your contact information up-to-date with each of your retirement plans.