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.
When it comes to managing your 401(k) after leaving your employment, you have a variety of alternatives, including:
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.
Most plans will let you keep your money in your 401(k) when you leave if it is little, say $5,000 or less
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.
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"
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.
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%.