Rollover Options
Before you roll over a 401(k), compare the options that could affect your retirement.
Leaving a job or entering retirement can create an important decision: what should you do with a former employer retirement plan? Depending on your plan and personal circumstances, options may include leaving assets in the plan, moving them to a new employer plan, rolling to an IRA, or taking a distribution.
Compare your options
| Option | When it may be worth exploring | Important questions and trade-offs |
|---|---|---|
| Leave assets in your former employer plan | If the plan allows it and you are comfortable with its investment lineup, fees, and services. | What are the plan's fees and investment choices? Are there restrictions on withdrawals or contact with the plan sponsor? |
| Move assets to a new employer plan | If you are changing jobs and the new plan accepts rollovers and offers features that matter to you. | Does the new plan accept rollovers? How do its fees and investment options compare with your prior plan or an IRA? |
| Roll over to an IRA | If you want a potentially wider range of investment choices or to consolidate accounts. | What are the fees, services, and investment options? Could you lose certain protections or plan-specific features by moving the money? |
| Take a distribution | In limited circumstances, such as an immediate need for funds, after reviewing tax consequences. | A distribution may trigger taxes and, depending on your age, potential penalties. This is generally reviewed carefully with a tax professional before acting. |
Questions worth asking before you move retirement assets
- What fees, expenses, and services come with each option?
- What investment choices are available in each option?
- Are there creditor protections or plan-specific features you could lose by moving funds?
- What are the tax implications of each option, and have you discussed them with a qualified tax professional?
- Does the new option meet your income, liquidity, and legacy goals?
A rollover decision review
A rollover decision review is intended to help you understand your available options and the trade-offs involved before making a move. It does not assume that any rollover, or any particular option, is right for your situation.
Frequently asked questions
Is rolling over my 401(k) always a good idea?+
No. A rollover is not automatically right for everyone. The best option depends on your plan's features, fees, investment choices, and your personal circumstances.
Can I leave my money in my old employer's plan?+
In many cases, yes, if your plan allows it and your balance meets any plan minimums. Whether that is a good option depends on the plan's fees, investment lineup, and services.
Will I owe taxes if I roll over my 401(k)?+
A properly completed rollover is generally not a taxable event, but rules vary and mistakes can trigger taxes or penalties. Consult a qualified tax professional before acting.
What is a direct rollover versus an indirect rollover?+
A direct rollover moves funds directly between accounts. An indirect rollover involves you receiving a distribution and redepositing it within a limited time window, which carries additional rules and risks. See IRS guidance for details.
Do you provide individualized advice on this page?+
No. This page is educational only. An individualized recommendation requires a full review of your circumstances in a one-on-one conversation.
Sources
We only cite official sources. This list is maintained as content is updated.
A rollover is not automatically right for everyone. Review fees, investment options, services, creditor protections, withdrawal rules, tax considerations, and other features before moving retirement assets. Be Wealth does not provide tax or legal advice.