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Have a 401(k) Plan at a Former Employer?

Have a 401(k) Plan at a Former Employer?


Here are some options for getting the most out of multiple retirement accounts.
You may have had multiple jobs over your career, and left behind retirement account balances of critical building blocks for your retirement. Here is a short guide to your options of what to do with a retirement account left with a former employer:
Roll it over to an IRA
• A rollover IRA allows you to continue any tax-deferred growth.
• A direct rollover IRA helps you avoid current taxes and early withdrawal penalties.
• You retain flexibility to select investments that fit your specific needs.
• A rollover IRA allows you to consolidate your retirement assets in one convenient place when you change jobs or decide to retire.
Leave it in Your Plan
• Leaving your account in your former plan lets you continue any tax-deferred growth.
• As long as you don’t take money out before age 59½, you avoid federal income taxes and a 10% early withdrawal penalty.
• You always have the option to move your savings to another retirement plan later.
• You have continued access to your plan and its investment options, which may be perfectly suitable for your needs.
• You may be protected from creditors.
• You may benefit from lower fees than you would pay in other options.
Transfer it to your current qualified plan (401k, 403b)
• Transferring your account to your current plan lets you avoid current taxes, early withdrawal penalties, and continues any tax-deferred growth.
• Depending on your plan, you may be able to consolidate other retirement assets in one account.
• Your current plan may allow you to borrow from your account (although this
generally is not recommended).
• You may be protected from creditors.
• You may benefit from lower fees than you would pay in other options.
You also have the option to take a withdrawal from your qualified plan account. Taking
money now means you will have money right now, but it could come at a price of an
early withdrawal penalty and taxes due.
Have more questions? Consult your benefits administrator or advisor for guidance on
the option that’s most appropriate for your individual circumstances.
Securities offered through LPL Financial, member FINRA/SIPC. Investment advice offered through Barnes Capital Group, a Registered Investment Advisor. Barnes Capital Group is a separate entity from LPL Financial.

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