What to Do With Your 401(k) When You Leave a Job?

Understanding your options to stay on track with retirement savings

Between high contribution limits, tax advantages, and potential employer matching, a 401(k) can be a home run for building long-term wealth. But if you’ve left an employer—or are planning a transition soon—you’ll want to be intentional about what happens to your retirement savings.

Here are four options for managing your 401(k) after leaving a job:

1. Keep your existing 401(k)

This is often the easiest path. As long as your former employer allows it, you can leave your funds where they are.

• Pro: No action required.

• Con: Not all employers permit it once you’ve left. It's a good idea to confirm with your HR department.

  
  

2. Rollover to a new employer’s 401(k)

If your new company offers a retirement plan, you may be able to roll your old 401(k) into the new one.

• Pro: Keeps your retirement dollars in a tax-deferred account and lets you benefit from future employer matching.

• Con: Your investment choices will be limited to whatever the new plan offers.

  
  

3. Rollover to an IRA

This is a common move when leaving an employer, especially if your new job doesn’t offer a 401(k).

• Pro: IRAs give you more control and flexibility over your investment options.

• Con: No employer match and lower annual contribution limits compared to a 401(k).

  
  

4. Withdraw the money

In a pinch, you can withdraw your 401(k) funds—but this should be a last resort.

• Pro: Access to cash when needed.

• Con: Likely subject to income tax and early withdrawal penalties if you're under age 59½.

  
  

At a Glance

Option	Pro	Con
Keep it	No action needed	May not be permitted
New 401(k)	Maintain tax-deferred status	Limited investment options
IRA	More control and flexibility	Lower contributions and no match
Withdraw	Access cash now	Taxes and penalties apply

Don’t Let Your 401(k) Drift

Managing your old 401(k) is just one piece of your broader financial puzzle. Whether you’re changing jobs, considering retirement, or just want to simplify accounts, I can help you explore the best strategy for your situation.

Located here in Tampa, I work virtually and in person with clients looking to take the guesswork out of their financial decisions.

Let’s chat about how to make your money work harder—book a free consultation today.

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