401(k) Rollovers
Exploring your options: rolling over your retirement account
Switching jobs or heading into retirement, you have four choices for your employer plan. Each has real trade-offs. Here's the honest version.
Your four options
Leave it in the old plan
Zero effort, and some plans have cheap institutional funds worth keeping. But forgotten accounts drift — no one is watching allocation, fees, or beneficiaries.
Move it to your new employer's plan
Keeps everything in one workplace wrapper and preserves loan options, but you're limited to the new plan's investment menu.
Take the cash
Almost always the costliest path: income taxes plus a possible 10% penalty before 59½, and your retirement compounding stops cold.
Roll it into an IRA
The widest investment menu, consolidated management, simpler taxes and beneficiary planning — the right move for many people, but not all.
Why a rollover often makes sense
Simplified management
Fewer accounts to track means an allocation you can actually see and steer.
Reduced fees
Consolidating can lower account and investment management fees.
Optimized strategies
A full investment menu and professional management instead of a fixed plan lineup.
Easier tax management
One account simplifies reporting, withholding, and future distributions.
Beneficiary clarity
Updated beneficiary designations ensure your wishes are actually carried out.
And when it doesn't
We tell clients this plainly: some 401(k)s are worth keeping. Institutional share classes your plan negotiated can be cheaper than anything available in an IRA. Employer stock with net unrealized appreciation can carry a major tax advantage a rollover destroys. If you separated from service at 55 or later, your plan allows penalty-free withdrawals an IRA won't until 59½. Our review checks all of this first — if staying put is the better answer, that's the answer you'll get.
Common questions
What are my options for an old 401(k)?
You generally have four: leave the money in your former employer's plan, transfer it to your new employer's plan, take a cash distribution (usually the costliest choice due to taxes and potential penalties), or roll it over into an IRA.
Is a 401(k) rollover taxable?
A direct rollover to an IRA or another qualified plan is not a taxable event. Taxes generally apply only if you take the money as a cash distribution, and an early withdrawal penalty may apply before age 59½.
When is keeping my 401(k) where it is the better choice?
Sometimes leaving it alone wins: some plans offer institutional funds cheaper than retail alternatives, strong creditor protection, the age-55 separation-from-service withdrawal rule, or company stock with net unrealized appreciation that a rollover would forfeit. We review these factors before recommending anything.
How long does a rollover take?
Most direct rollovers complete in one to three weeks depending on the plan administrator. We handle the coordination and paperwork with you, step by step.
Have a Fidelity plan? See the Fidelity-specific guide →