IRA or 401(k)

Pension & Rollover Options When You Change Jobs

It’s not always easy to predict where your career will take you. Maybe you’ve found yourself exploring new directions, taking on new opportunities or starting your own company. Whatever road you take, be sure to take your 401(k) along with you. Even if you’ve left behind several 401(k) plans in the past, a financial advisor can help consolidate them into one place.

Here are some options to consider with your 401(k) when you change jobs:

Option 1: Leave the funds with your former employer's plan

It sounds simple, but this may be a very costly choice. That’s because you might not have the option to add to the plan, nor make any allocation changes until you move the funds.

Option 2: Do a direct transfer of the funds to another 401(k)

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.

Option 3: Roll the funds into an IRA

An IRA will give you more control over your investment dollars and more investment options. If you have a deferred compensation plans such as a 457(b), it could be rolled into an IRA when employment ends if it qualifies for this action. This process 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.

Option 4: Cash out your 401(k) early and pay the penalties

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

We can help

Whether you’re nearing retirement, or have some time to ponder the
options, we’re here to help. Please feel free to reach out Rahil Machiwalla. He is available to chat by phone or he can meet you for a complimentary appointment at any of our 1st United branches.

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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