OK, short story, I have been laid off. I will be getting unemployment while I look for another job. DH makes pretty good money, but we can't make it on his salary alone. We exected this and have made finanical arrangements. Basically, we will make it through the holidays just fine.

Here is my quesiton though. I have a 401k with my employer and profit sharing. I contributed to 401k for about a year and a half, the balance is about 2000 or so, as far as the profit sharing, I am pretty sure that he has not had much profit to put there in the past few years, and it would take 7 years for me to be "vested"....

Can somone please explain to me what this all means?
Thanks

If you haven't been there 7 years you get no profit sharing money. Roll your 401K money into an IRA with Trowe Price or other major fund shop.

Yep. If you're not vested, you lose all the profit sharing money. But and here's where you have to read your employee handbook, you may be entitled to something if there is a graduated vesting schedule. Some companies will vest you gradually, like you own 20% after each year of service.

As far as the 401k, again read the handbook about the rules for keeping your money in their managed plan. Many employers put a minimum balance on 401k accounts for you to leave it there if you leave on your own accord or not. If you are under their minimum balance, the clock is running and you need to roll that money over to an IRA account ASAP. Typically, I've seen 60 days from termination for the time period. After 60 days, the employer will liquid your account and send the money in a check payable to you. If that happens, it'll be a disaster as 20% will be withheld off the top and since the money is made payable to you, you will have to report this money as ordinary income. Which not only increases your tax liability for the year but you'll also be hit with a 10% penalty for early withdrawal from the IRS.