The COVID-19 crisis has already forced millions of workers into unemployment, and countless more may also be on the chopping block. If you're worried about getting laid off, there are probably a number of stressful questions floating around in your head. Will you qualify for unemployment benefits? How long till your savings run out? What will you do for health insurance? And what happens to your retirement account?

If you've been contributing to your employer's 401(k), the last thing you want is to risk losing that money. And thankfully, you won't have to. Your employer is not allowed to keep the money you contributed from your own earnings just because you've been let go. Here are the options you may be privy to with regard to that account.

401k in gold numbers/letter on a wooden surface


Option 1: Leave your money where it is

If you have more than $5,000 sitting in your 401(k), you may be able to leave your money in your employer's plan. If you go this route, you'll still get to dictate how your money is invested (within the confines of that plan's choices, of course).

Option 2: Roll your money into an IRA

When you move from one job to another, you can roll an existing 401(k) into your new employer's plan. But when you're laid off, there's generally no new job to transition to. A good option, therefore, is to open up an IRA and roll your 401(k) into it directly. You can open an IRA at most banks or financial institutions, and as an added bonus, you'll generally get more investment choices than with a 401(k).

Option 3: Cash out some or all of your account

Before we go any further, let's be clear: This really isn't the option you want to move forward with. The purpose of a 401(k) is to provide income for you in retirement. If you cash out some or all that account, you'll risk not having enough money to pay your bills when your time in the workforce comes to an end for good. Additionally, you're not allowed to cash out a 401(k) prior to age 59 1/2, so if you do, you'll usually be hit with a 10% early withdrawal penalty on the amount you fail to roll into a new retirement plan.

Right now, however, you get a little more leeway. Due to the COVID-19 crisis, you can now withdraw up to $100,000 from a 401(k) prior to age 59 1/2 and avoid that penalty. But raiding your 401(k) makes little sense unless you're truly desperate for money and can't pay your bills without taking that withdrawal.

If you're convinced you'll be laid off, don't plan on removing money from your 401(k) until you've exhausted all other options, including filing for unemployment and reaching out to your lenders and service providers and asking for relief. Unemployment benefits now get a $600 weekly boost across the board, so depending on how much you earn, you may find that once you're laid off, you're paid enough in unemployment to replace the bulk of your paycheck.

Many workers are worried about losing their jobs these days, but one thing you don't necessarily need to stress about is your 401(k). You'll still have an opportunity to keep that money invested for retirement, and in a worst-case scenario, you can even take an early withdrawal if your financial situation becomes truly dire.