Your 401(k) When Switching Jobs

Introduction

When you change jobs, you may have several choices regarding your company's retirement plan savings:

  • leave the money where it is, if your former employer has these provisions in its 401(k) plan
  • roll it over into an IRA or into your new employer's retirement plan
  • receive it in hand to spend or invest

If your account balance is at least $1,000, the 401(k) plan may rollover your entire account balance automatically to a designated IRA unless you elect to have the distribution transferred to a different IRA or retirement plan, or to receive it directly. If your account is worth more than $5,000, the plan cannot pay out your account balance until you tell the plan administrator you want the money—in other words, when you consent to the distribution. So be sure to fill out your plan's 401(k) final distribution form if you want to take the money with you. If you decide to leave the money in the plan, you can do so at least until the later of the age specified in the plan or age 72, when you must begin taking required minimum distributions.

SUGGESTION: If you are required to take a total distribution, you can roll over the money into a traditional IRA or your new employer's retirement plan. You can continue where you left off in saving for your retirement.

IMPORTANT NOTE: There may be a fee involved if you leave the money in your former employer's 401(k) plan. Be sure to check with the plan administrator before making your decision.

 

Share Article:
Add to GooglePlus

Securities and advisory services are offered through LPL Financial (LPL), a registered investment advisor and broker-dealer (member FINRA/SIPC). Insurance products are offered through LPL or its licensed affiliates. Heartland Bank and Heartland Planning Associates are not registered as a broker-dealer or investment advisor. Registered representatives of LPL offer products and services using Heartland Planning Associates, and may also be employees of Heartland Bank. These products and services are being offered through LPL or its affiliates, which are separate entities from, and not affiliates of, Heartland Bank and Heartland Planning Associates. Securities and insurance offered through LPL or its affiliates are:

Not Insured by FDIC or Any Other
Government Agency
Not Bank
Guaranteed
Not Bank Deposits or
Obligations
May Lose
Value

 

The LPL Financial registered representatives associated with this website may discuss and/or transact business only with residents of the states in which they are properly registered or licensed. No offers may be made or accepted from any resident of any other state.


Heartland Bank ("Financial Institution") provides referrals to financial professionals of LPL Financial LLC ("LPL") pursuant to an agreement that allows LPL to pay the Financial Institution for these referrals. This creates an incentive for the Financial Institution to make these referrals, resulting in a conflict of interest. The Financial Institution is not a current client of LPL for brokerage or advisory services. Please visit https://www.lpl.com/disclosures/is-lpl-relationship-disclosure.html or scan the QR code below for more detailed information.

BrokerCheck