Comments on: Deciding What to Do With Your 401(k) When You Change Jobs

By: yepyep

yepyep — Thu, 29 Dec 2011 01:00:42 +0000

Just roll it into an IRA cash sweep account as it will be federally insured similar to a savings account; without tax and early withdrawal penalties. Leave it there and take some time to learn of your options. Of course, you can later move it into a 401k investment, later, when the markets are more stable. Don’t feel pressured to roll your 401k into another new one, as you can take some time to decide. Rolling into a new 401k will result in being at risk with this crappy current volitile stock market and economy, be forced to deal with the ‘new’ 401k plan rules, and not be federally insured against loss.
I assure you that no financial manager will tell you to take this cash sweep IRA option, as there’s no gain for them in this method. Remember, it’s your money, and you can use a job change as an opportunity to ‘park it’ as a cash sweep IRA account until you decide to invest it, later!

By: JOHN L.

JOHN L. — Wed, 09 Nov 2011 11:18:23 +0000

I left my 401 with my old employer 12 years ago. I am 55 years old. I have been medically retired and receive social security disability for the last 5 years. Can I withdraw the 401 k without penalties ?
Thanks
JL

By: Ryan

Ryan — Mon, 02 May 2011 18:01:51 +0000

Dally, you have other options than leaving your money in your 401k, or rolling it into a new 401k. You can also roll it into an IRA, which will maintain the tax benefits and give your more control over your investments. Withdrawing the money is another option, but as you mentioned, you will need to pay penalties and taxes. Depending on your income bracket, you may lose close to half your investment by withdrawing it now. Keep in mind this money will go for both your retirement and your future husband’s so it’s important to include him in the decision. My recommendation is to hold off and sit down with him and a financial planner and make the best decision for your marital finances.

By: Dally

Dally — Mon, 02 May 2011 17:16:52 +0000

I’m 26 years old. I’m relocating to California because I’m engaged and my fiance lives in San Jose, CA . I don’t have a job offer in California and I’m basically moving there and then looking for a job. I’m extremely confused on what to do with my 401k. I know the best option is to leave it with my old job until I find a new one and I can do a direct rollover to my new employer. The thing is, I dont know when that’s going to be or if my future employer will even offer 401k program. I’m considering the possibility of cashing my 401k and using it for my wedding . At least the little amount that will be left after penalties and taxes. I could really use the money. If I cash out my 401k I know it will not be the smartes decision but I figured I’m young enough to start again and still be in good shape for when I retired. Is cashing out too bad of a decision giving my situation?

By: Ryan

Ryan — Mon, 27 Dec 2010 15:41:54 +0000

Bob, I’m not sure if you can do a partial rollover, but my line of thinking is that if you are going to move some of it, you may as well move all of it. The purpose of rolling over an IRA is to streamline account management, control costs, make it easier to balance your asset allocation, etc.

By: Bob

Bob — Sun, 26 Dec 2010 23:22:03 +0000

I am changing jobs and making a big cross country move in the process. I am wondering if it’s allowable to withdrawl some, and re-invest the new employers plan. I’m sure there is cost involved in this. Any idea’s? Or is this just a poor idea?

Bob

By: Ryan

Ryan — Mon, 02 Jun 2008 21:12:34 +0000

Brian, great point!

By: Brian

Brian — Mon, 02 Jun 2008 20:33:29 +0000

Don’t forget to check if there are any account fees in the old 401k plan. Most companies don’t pay the cost of maintaining accounts for former employees