Changing Jobs: What Happens to Your 401(k)?

May 17

There’s a lot involved in moving to a new company, and normal for some to put some of the more tedious housekeeping items on the back burner. Besides all the job-related changes, you need to understand your new health insurance and set up your new 401(k) to continue your annual contribution.

But what happens to your old 401(k)? It stays where it is for many people, and they end up with multiple 401(k) accounts. There may be some benefits if the old plan offers investments that you prefer to keep or provide diversification from the new plan. However, it can also make record-keeping onerous, and it can become challenging to understand your accurate risk exposure.

A better approach is to understand your options and make the best decision based on your tax status and the rest of your financial plan.

The Options for 401(k) Portability

You generally have four options for the vested assets... ...