Easy Ways to Rollover Your 401k When Changing Jobs

When you change employers, you will need to take advantage of your previous and future employer’s 401k rollover options to successfully move your funds from each account. You may have the option to stay with the same type of 401k retirement plan as your previous company, move everything to an IRA account, or transfer the funds to another type of qualified retirement account, such as a Roth IRA.

There are several things you can do to make this transition as smooth as possible. Here are some easy ways to roll over your 401k account when changing jobs:

1. Determine what your new employer’s roll over process is. If you plan on staying with the same type of account, you may be able to simply sign documentation that authorizes your new employer to make the switch. In other cases, the process may be a little more complicated. Find out what you new employer’s roll over process is by contacting the Human Resources department.

2. Consult with a financial advisor. It may be in your best interest to meet with a financial advisor to discuss your options before making the move. A professional financial advisor may be able to review your accounts and explain what the benefits are of changing to a different retirement plan or account.

3. Don’t withdraw any funds during the transition. Withdrawing from your 401k will cost you a significant amount in penalties and fees. Don’t agree to accept a withdrawal check from your employer or you risk heavy taxes and high penalties. The best thing you can do is to simply initiate a transfer.

4. Shop around for rates and options. When you are going to initiate a roll over, consider the best value for your investment. Review your options in Roth IRAs and other qualified retirement accounts so that you can make the most informed financial decisions.

5. Learn all the details about your new employer’s sponsored 401k plan. Meet with the company’s Human Resources department so that they can go over all the intricacies of their sponsored plan, and explain how and when your contributions are made. Obtain a copy of this benefit in writing so that you can discuss your options with your own personal financial advisor or accountant.

Changing jobs can be stressful, and you will need to make some informed decisions about your existing 401k account. Use these tips so that you can easily manage the roll over process during the transition.

Tags: 401k account, 401k rollover, retirement plans, roth 401k