Changing jobs? Learn 5 smart strategies to manage your old 401(k) and avoid
costly mistakes.
Need quick answers? Click the button below!
What to Do with Your Old 401(k)
Option 1: Leave it Where It Is
If the plan offers low fees and good investment choices, keeping your old 401(k) may be fine. But managing multiple accounts gets complicated over time, and you might miss opportunities to consolidate or rebalance your portfolio.
Option 2: Cashing Out
Withdrawals before age 59½ trigger a 10% penalty plus income tax. Unless it's a true emergency, avoid this option — you'll lose money and miss long-term growth.
Option 3: Roll Into New Employer’s 401(k)
Rolling your old plan into your new 401(k) simplifies account management and may boost your 401(k) loan capacity. Some plans even allow penalty-free withdrawals starting at age 55.
Option 4: Traditional IRA Rollover
A Traditional IRA offers broader investment options like ETFs and stocks. Great for self-managed portfolios, but be cautious if you're planning a Backdoor Roth IRA.
Option 5: Roth IRA Conversion
Pay taxes now, enjoy tax-free growth later. Roth IRAs are perfect for long-term planners and those expecting higher future income. Just remember: conversions add to your taxable income this year.
Quick Guide: What’s Right for You?
Choose based on your goals — 401(k) for simplicity, IRA for control, Roth for future tax efficiency.
⚠️ Always Use a Direct Rollover
A trustee-to-trustee transfer avoids IRS penalties. Never deposit the check yourself — it may be taxed as a withdrawal.
Final Tip
Your retirement money deserves a strategy — don’t let it sit idle. Make a smart move today and let your money work for you.
