How Long Do You Have to Move Your 401(k) After Leaving a Job?

How Long Do You Have to Move Your 401(k) After Leaving a Job?

You have 60 days after leaving a job to roll over a 401(k) into an IRA, but you have a lot of other alternatives when it comes to managing your retirement assets in these situations.

What happens to your 401(k) if you leave your job?

When it comes to managing your 401(k) after leaving your employment, you have a variety of alternatives, including:

Move the 401(k) to your new employer’s 401(k)

The old plan administrator can easily transfer the contents of your account via a direct transfer into the new plan account with a little bit of documentation. 

Leave the 401(k) in the care of your former employer

Most plans will let you keep your money in your 401(k) when you leave if it is little, say $5,000 or less

Roll the 401(k) over into an IRA

What if you’re not moving to a new employer immediately or your new employer doesn’t offer a 401(k)? In these circumstances, stashing your money in an IRA with the financial institution of your choice is a freeing solution.

Agree to take the distributions

At age 59.5, you can begin taking penalty-free withdrawals from your funds if you're retiring. If you don't fulfill the requirements for the "hardship exception"

Agree to take the distributions

or the "IRS Rule of 55," you can still receive a distribution if you're younger than 59.5, but you'll have to pay a 10% penalty.

Cash it out

Your former 401(k) account will be liquidated if you take a lump sum distribution, but you will be responsible for the full tax burden and might be charged an early withdrawal penalty of 10%.



10 New Job Fields for Women in 2022

10 Steps to a Resume That Will Get You Hired

10 Important Career Tips for Women