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Don’t Leave Your 401(k) Behind – Options When Changing Jobs

If you’ve been paying into your company-sponsored 401(k) and leave the company – either by choice or through a layoff or termination – those funds are still yours and you can either take them with you or leave them where they are. Even if it’s been a few years since you left the company, you should still be able to get access to those funds. Here are some options for what you can do with your 401(k) when you leave a company:

Leave it.

Most companies will allow you to keep your 401(k) with them but you typically won’t have the option to add to the plan, which could cost you in long-term earnings.

Transfer it.

Transitioning your funds to a new employer’s 401(k) may be an option you will want to consider. Check with your new employer for availability.

Roll it.

Moving your 401(k) to an IRA will give you more control over your investment dollars and more investment options. If you have a deferred compensation plan such as a 457(b), it could be rolled into an IRA when employment ends if it qualifies. It depends on the deferred compensation administrator and the new IRA custodian, so be sure to check the details or ask your financial advisor for assistance.

Cash it out.

Due to the tax implications and penalties for early withdrawal, this is by far the most costly option and one that should be taken as a last resort. Check with your tax professional first.

If you’re uncertain what to do with your 401(k) or just need some guidance on retirement planning in general, let us know. Our financial advisor through CUSO Financial Services, L.P.* at 1st United Credit Union can help you with your 401(k) plan and, if needed, consolidation of those funds. He’s available to talk by phone or meet you at any 1st United branch. Schedule your appointment today.

This information brought to you by:

Rahil Machiwalla, CFS Financial Adivsor
Rahil Machiwalla, CUSO Financial Services, L.P.*
Financial Advisor
(925) 598-4718
CA Insurance Number: 0G20361

Get Started with a Complimentary Consultation

*Non-deposit investment products and services are offered through CUSO Financial Services, L.P. (“CFS”), a registered broker-dealer (Member FINRA/SIPC) and SEC Registered Investment Advisor. Products offered through CFS: are not NCUA/NCUSIF or otherwise federally insured, are not guarantees or obligations of the Credit Union, and may involve investment risk including possible loss of principal. Investment Representatives are registered through CFS. The Credit Union has contracted with CFS to make non-deposit investment products and services available to Credit Union members. Please consult a qualified tax advisor for specific tax advice. View CFS Referral Disclosure
Before deciding whether to retain assets in an employer sponsored plan or roll over to an IRA an investor should consider various factors including, but not limited to: investment options, fees and expenses, services, withdrawal penalties, protection from creditors and legal judgments, required minimum distributions and possession of employer stock.

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