Roll over your old 401K into an IRA
- Your investments will remain tax-deferred until you withdraw them
- You will have access to a wide range of investments, including mutual funds, ETFs, stocks, bonds, options and more
- You will have access to a wide range of tools, resources, and services
- You may have the flexibility to convert to a Roth IRA
- You may still have the option to move assets to a future employer’s plan later
- You may be able to take penalty-free withdrawals prior to age 59½ in special circumstances (such as higher education expenses, health insurance premiums or a first-time home purchase)
Leave the assets in your former employer’s plan
- Your investment plan choices may include low-cost, institutional-class products
- Your total costs may be lower than other alternatives
- Your investments will remain tax-deferred until you withdraw them
- You may be able to take loans against your account
- You may not have to take any action or complete additional paperwork
- You may be able to take penalty-free withdrawals if you left your old employer between age 55 and 59
- Your retirement plan balances may be protected from creditors and legal judgements under federal law
- You may still be able to roll over to a future employer's plan later
- You would still have access to investor education, guidance and planning provided to plan participants
- The investment choices on your plan menu were selected by a plan fiduciary
- Your investment choices would be limited to those in the plan
- Your former employer may pass certain plan administration or recordkeeping fees through to you
- Even though you would still participate in the plan, you would not be able to contribute any new funds
- Managing your investments among multiple accounts can be a lot of work
Roll over the assets into a new employer’s plan
- Your total costs may be lower than other alternatives
- Your investments will remain tax-deferred until you withdraw them
- You may be able to take loans against your account
- You may be able to take penalty-free withdrawals if you leave your new employer between age 55 and 59
- Your retirement plan balances may be protected from creditors and legal judgements under federal law
- Your plan investment choices may include low-cost, institutional-class products
- You may have access to investor education, guidance and planning that your new employer provides to plan participants
- The investment choices on your plan menu were selected by a plan fiduciary
- If you roll over to a new employer's plan you may not have to take required minimum distributions (RMDs) if you decide to keep working
- Your investment choices would be limited to those in the plan
- Your new employer may pass certain plan administration or recordkeeping fees through to you
- You may be required to complete paperwork to have your assets moved over
- If you hold appreciated employer stock in your former employer's plan account, there may be tax consequences. You should consult with a tax advisor.
Take a cash distribution
- Your money (after any taxes and applicable penalties) will be immediately available to you
- Your retirement savings will be depleted
- The amount that you cash out will be subject to mandatory 20% withholding for federal taxes if under age 59½
- Your distribution will be subject to applicable federal, state and local taxes
- You may be subject to a 10% penalty if you are under age 59½