// The old 401(k)
Before moving an old 401(k), compare the doors.
Leaving a job creates options. It does not always create a reason to move the account immediately. Start by comparing what each destination changes.
01
Leaving it in the old plan
An old employer plan may still offer useful investments, pricing, creditor protections, or withdrawal features. The plan document and fee disclosure show what remains available after employment ends.
A small balance may be subject to automatic distribution rules. Confirm the plan threshold before assuming the account can stay where it is.
02
Moving it to a new employer plan
A new employer plan can simplify the number of accounts you manage. First confirm that the new plan accepts incoming rollovers.
Compare its investments, fees, service, loan rules, and distribution options with the old plan. Consolidation is useful only when the destination also makes sense.
03
Rolling it to an IRA
An IRA may offer a wider investment menu and a different service model. It can also change plan specific protections, withdrawal rules, and the tax mechanics of future Roth contribution strategies.
A rollover is a significant decision. Compare the account, service, costs, conflicts, and tax consequences before acting.
04
How the money moves matters
A direct rollover sends eligible money to the receiving account without paying it to you first. If a plan distribution is paid to you, federal withholding and a 60 day rollover clock can apply.
Cashing out can create current taxable income and may create an additional tax. A CPA can confirm the result for your situation.
05
Questions to put on one page
These questions turn a generic rollover choice into a comparison of real doors.
- Can the money remain in the old plan?
- Will the new plan accept a rollover?
- How do investments, fees, and services compare?
- Are any plan specific withdrawal features important?
- Would an IRA affect another tax strategy?
- Who is paid if the account moves?
Primary sources