When changing jobs and before leaving your current employer, it’s essential to give your employer timely instructions regarding your employer-sponsored retirement plan.
And depending on the plan’s rules, if the balance in your employer-sponsored retirement plan is less than $5,000, you may be required to either take the money with you in cash or roll over your balance to another eligible retirement plan or traditional IRA.
Did you leave behind a 401(k), 403(b), or 457 governmental deferred compensation plan at a former job or are you about to? If so, depending on your specific situation and assuming you’re not ready to retire, you generally have four options for your savings:
- Roll over your plan to an IRA
- Leave your savings with your former employer
- Move your savings to your new employer plan
- Cash out and pay taxes
For help deciding which option is best for you and what you should consider before making any moves, review the following sections: