career change 401k

Making a career change? Here’s what you can do with your 401(k)

You've worked hard to save money in your 401(k) plan. But now that you're moving employers, what will happen with all of the money you saved? That choice is up to you. Consider your options for what to do with your 401(k) when you change employers.

Leave it

Are you happy with your current 401(k) plan and its investment options? If so, you may have the opportunity to leave your plan where it is. This option is also the easiest, since leaving your 401(k) with your original employer won't require you to take any action.

However, not all plans will allow you to maintain your account after you've left your employer, and even if your previous employer allows you to leave your plan, if you have a low account balance, they may elect to distribute the funds back to you. Check in with your plan administrator to see if leaving your 401(k) is an option.

Transfer it

Does having many different financial accounts stress you out? If so, you may want to consider consolidating your accounts by transferring assets from your old 401(k) to your new employer's plan. This option will be especially useful if your new employer's plan has more flexibility and investment options.

However, some employers don't allow for such transfers, so you will first need to check in with your new employer to ensure they allow for this action.

Roll it over

Would you like to maintain a tax-advantaged retirement account but have more investment options? If so, rolling over your assets into an IRA account might be a good option for you. An IRA rollover allows you to continue investing in a tax-advantaged retirement account while giving you more control over your investments.

Just remember that by eliminating your 401(k), you may have less creditor protection and could lose access to a 401(k) loan.

Cash it out

Do you need cash now? If so, you can cash out your 401(k) plan early. This will give you access to your money right away, which you can use to pay for expenses, a house, education costs, or anything else you might need.

However, you will pay a hefty price to do so. Cashing out a 401(k) plan before retirement age could result in paying ordinary income taxes on your account balance, along with a 10% early withdrawal penalty.

It's your money

Changing jobs can come with stress and logistical challenges. But, when it comes to your old 401(k) plan, it's good to know your options so that you can feel at ease. Because at the end of the day, the money in your 401(k) belongs to you, and you should feel empowered to make the best decision for yourself and your family.

Ready to take action or want to learn more? We're here to provide personalized guidance based on your unique circumstances, ensuring your financial