Career Change Ahead? Don’t Forget Your 401(k)
Leaving a job is a big transition—professionally, emotionally, and financially. Amid the excitement of new opportunities (or the stress of unexpected change), one critical decision often gets overlooked: What should you do with your old 401(k)?
If you’ve built up retirement savings in a workplace plan, don’t let it drift into autopilot. Your next move could have long-term implications for your financial future, including taxes, fees, and investment flexibility. Let’s walk through your options so you can make a confident, informed choice.
🚦Option 1: Leave It Where It Is
Pros:
• No immediate action required
• Investments stay intact
• Potential access to institutional funds
Cons:
• Limited control or visibility
• Former employer may restrict access or communication
• You might forget about it over time
Best for: Those happy with the investment lineup and fees, and who don’t mind managing multiple accounts.
🔄 Option 2: Roll It Over to Your New Employer’s Plan
Pros:
• Keeps all your retirement savings in one place
• May offer lower fees or better investment options
• Avoids triggering taxes
Cons:
• Not all employers accept rollovers
• New plan may have limited flexibility
Best for: Those who want simplicity and are confident in their new plan’s offerings.
🏦 Option 3: Roll It Into an IRA
Pros:
• Full control over investments
• Wide range of options (ETFs, mutual funds, etc.)
• Potentially lower fees
Cons:
• Requires setup and management
• Watch out for hidden fees or poor fund choices
Best for: Those who want flexibility, control, and the ability to consolidate accounts.
💸 Option 4: Cash It Out
Pros:
• Immediate access to funds
Cons:
• Taxes and penalties (if under age 59½)
• Loss of future growth
• Could derail retirement goals
Best for: Emergency situations only. This is usually the least advisable option.
🧭 So What Should You Do?
There’s no one-size-fits-all answer. Your decision depends on your financial goals, tax situation, investment preferences, and how much you value simplicity vs. control.
Before making a move, take a moment to pause and plan. A quick conversation with a financial planner can help you weigh the pros and cons, avoid costly mistakes, and align your retirement strategy with your new career path.
✅ Final Thought
Your 401(k) isn’t just a leftover account. It’s a building block of your future. Whether you’re stepping into a new role or taking time to regroup, make sure your retirement savings are working as hard as you are.
Let’s talk through your options before you make a move.