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What Do I Do with My Old 401(k)?

July 10, 2023

If you've recently changed jobs or retired, you may be wondering what to do with your old 401(k) plan. Here are some options to consider:


Roll Over to an IRA: One option is to roll over your 401(k) into an individual retirement account (IRA). This can give you more investment options and greater control over your retirement savings. Plus, it can be easier to manage your retirement accounts if they're all in one place.


Leave It with Your Former Employer: Another option is to leave your 401(k) with your former employer. This can be a good choice if you're happy with the investment options and fees associated with the plan. However, keep in mind that you won't be able to contribute to the plan once you've left the company.


Roll Over to Your New Employer's Plan: If your new employer offers a 401(k) plan, you may be able to roll over your old plan into the new one. This can be a convenient way to consolidate your retirement savings, but make sure to compare the investment options and fees of both plans before making a decision.


Cash Out: While this is an option, it's generally not recommended. Cashing out your 401(k) can result in a significant tax bill and penalties, and can deplete your retirement savings.


Seek Professional Advice: If you're unsure about what to do with your old 401(k), consider seeking advice from a financial advisor. They can help you evaluate your options and make an informed decision based on your unique situation and goals.


When considering what to do with your old 401(k), it's important to weigh the benefits and drawbacks of each option. Consider factors such as investment options, fees, taxes, and your overall retirement goals. With careful consideration and professional guidance, you can make the best decision for your financial future.