TB: You should call the provider for your old plan and tell them you have changed your mind. You should be able to return the check and have them reprocess it as a taxable distribution. You may have to pay an additional fee to do this because the provider will have to issue a new check and withhold taxes. The amount it is required to withhold for taxes will be equal to 20 percent of the total distribution. But, you may have to pay additional income taxes depending on what tax bracket your income falls into. You will also have to pay a 10 percent early distribution penalty if you left your old employer before the year in which you turned 55.

Typically, between 35 percent and 45 percent of the original balance is lost to taxes (federal, state and penalties) when 401(k) money is distributed early. As a result, I strongly recommend continuing with the rollover you planned. Alternately, you could roll the money to an IRA rather than a new employer's plan. This will give you more flexibility concerning possible withdrawals.

I understand your concern that you may lose your job, but you may not. Even if you do lose your job, you can withdraw the money from the IRA at any time to pay off your bills. Again, you will owe appropriate taxes and penalties. You can place the IRA money in a money market fund or some other non-stock investment, particularly if you may have to withdraw the money in the near future to pay your bills.

I do want to comment on your general fear of investing in stocks at this time. Unfortunately many less knowledgeable investors tend to buy stocks when the stock market is booming like it was three years ago and they won't touch stocks during gloomy times. This is the opposite of what investors should do. As an investor sometimes you need to adopt a consumer's outlook. When prices are falling, that's the time to be bargain hunting. Here's an apt illustration: would you rather buy the same new car for $20,000 or $15,000? The answer is obvious.

Q: What are the differences between class A, B and C shares for a particular fund? What type is found most commonly in a 401(k)?

TB: The different classes of a particular fund have different acquisition costs and annual management fees. Some involve front-end loads, which reduce the amount that is actually invested to buy fund shares. For example, a 5 percent load means that only 95 cents of every $1.00 you contribute is used to buy shares.

Shares with higher annual fees reduce your net return each year by this additional fee, which applies to the total amount you have invested. For example, assume the fund management fee is 1.0 percent for A shares and 1.5 percent for C shares. Investors who own C shares will get a 0.5 percent lower return than investors who own A shares.

Larger 401(k) plans invest in A shares and they may even receive additional fee breaks or rebates. Shares with less attractive fee structures are common among plans of smaller employers, particularly those that have less than $1 million in plan assets.

Q: I have a question regarding the $170,000 compensation limit. Say I work from Jan. 1 to Dec. 31 in 2001. By Oct. 15, my reportable W-2 wages reach $170,000. Will my employer automatically shut me off from any future salary reduction or matching contributions?

My goal is to contribute up to the salary deferral limit for 2001 of $10,500 and if my employer cuts me off at $170,000 in October I will not reach $10,500 based on the percentage that I take from my pay.

TB: The way you have structured your contributions is the right way if your employer matches only during pay periods when you are contributing; however, neither employee nor employer contributions can be made from compensation in excess of $170,000. This means you have to plan your contributions so that you hit the $10,500 maximum by the time you earn $170,000. You should have been contributing 6.18 percent of your pay ($10,500 divided by $170,000) for the entire year so that you reach the limit by the time you earn $170,000. If you have been contributing less, you should increase your contributions so you hit $10,500 by the time you earn $170,000.

TB: You may not roll this money back into the plan. It is not the plan's money, it is the property of those former employees. You will need to find them.

One way of finding former employees is to ask other current or former employers who may have been friends with those you can't find. Other possibilities are to place newspaper ads or to contact the Social Security Administration.

A set of new 401(k) plan laws, which take effect Jan. 1, 2002, also permit employers to automatically roll vested benefits that are less than $5,000 and more than $1,000 to an IRA on behalf of the employee. This provision will help somewhat but you should wait for further guidance from the IRS as to how it will work before you use this new feature.

Another approach that will work is to make a distribution and withhold 100 percent for taxes. The former employee will ultimately get a refund of any excess taxes that have been paid. For example, it the vested benefit is $500, pay this amount to IRS as withheld taxes for the former employee.