Starting a new job means a lot of moving pieces. New direct deposit. New benefits. New everything.
And somewhere in the middle of all that, it's easy to forget about the retirement account sitting at your old employer.
It won't disappear. But leaving it there longer than you need to can cost you more than you'd think.
First: what actually happens to your old 401(k)?
When you leave a job, your old 401(k) doesn't go with you automatically. It stays where it is, managed by whoever your former employer used.
You have a few options for what to do with it.
Leave it where it is. This is the path of least resistance. It's also the one most people default to without realizing it's a choice. You lose the ability to contribute, you may pay higher fees, and it gets harder to keep track of as years go by.
Cash it out. This feels like relief in the short term. But if you're under 59½, you'll likely owe income taxes on the full amount plus a 10% early withdrawal penalty. What feels like a windfall can shrink fast.
Roll it over. This is usually the move worth looking at. You take the money from your old plan and move it into a new one, either your new employer's 401(k) or an IRA. You keep the tax advantages. You keep the growth working for you. And you have more control over where it goes.
Why this matters more at this stage of life
If you're in your mid-40s to late 50s, retirement isn't abstract anymore. It has a shape. Maybe even a date you've started thinking about.
The money sitting in that old account isn't just a number on a statement. It's time you've already put in. Compounding you've already earned. Moving it thoughtfully now can make a real difference in what you have when you get there.
A rollover done right is not complicated. But the window after a job change is actually one of the best times to do it, because you're already thinking about your finances and making decisions anyway.
What to watch out for
Not all rollovers are the same. A direct rollover, where the money moves straight from one account to another, is generally cleaner and avoids tax headaches. An indirect rollover, where the check comes to you first, comes with a 60-day window to redeposit it, or you may owe taxes and penalties.
Fees matter too. IRAs and 401(k)s can vary significantly in their fees. It's worth understanding what you're moving into, not just what you're moving out of.
You don't have to figure this out alone
A job change is a lot. You're not expected to also become a retirement planning expert overnight.
Our Wealth Advisors work with people exactly where you are: mid-career, in transition, trying to make sure the choices you make now set you up well for what's ahead.
There's no pressure. Just a real conversation about where you stand and what your options actually look like.
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