Left Your Job? Don’t Leave Your 401(k) Behind: 5 Things You Need to Know Before Rolling It Over

Jan 22, 2025

Collin Sinnott

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Left Your Job? Don’t Leave Your 401(k) Behind: 5 Things You Need to Know Before Rolling It Over

What You Need to Know About Rolling Over Your 401(k):

If you’ve recently left your job, figuring out what to do with your 401(k) may not feel urgent—but it should be. Your retirement account is one of the most powerful tools for building long-term wealth, and the decisions you make now can have lasting financial impacts. Here are five critical things to know before rolling over your 401(k):


1. Understand Your Options

You typically have four choices for your old 401(k):

  • Leave it with your previous employer: Convenient but limited investment control.

  • Roll it over into a new employer’s plan: Great if your new plan has strong investment options.

  • Roll it over into an IRA: Offers flexibility, better investment choices, and potentially lower fees.

  • Cash it out: Avoid this if possible—tax penalties and lost growth can hurt your future.


2. Beware of Hidden Fees

Not all 401(k) plans are created equal. Many older accounts come with high administrative fees or limited investment choices. Rolling your funds into an IRA could save you money over time, giving you more control over where your dollars go.


3. Watch Out for Taxes and Penalties

A direct rollover avoids tax headaches. By transferring funds directly into an IRA or another 401(k), you won’t trigger a taxable event. If you cash out or fail to reinvest, you may face penalties and an immediate tax bill.


4. Take Control of Your Investments

IRAs give you the power to choose from a wide array of investments—stocks, bonds, ETFs, or even alternative assets like real estate. A rollover lets you align your retirement plan with your personal goals and risk tolerance.


5. Don’t Do It Alone

Rolling over a 401(k) involves paperwork, deadlines, and nuanced decisions about tax implications. Partnering with a financial advisor ensures you’re making the best choices to protect and grow your retirement savings.


Let’s Make Your Retirement Savings Work for You

If you’re unsure about the best move for your old 401(k), let’s talk. A quick conversation could save you thousands in fees and set you on the path toward financial freedom.

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