Starting a new job comes with plenty to remember, from completing paperwork to meeting new colleagues. If you’ve forgotten about your old 401(k), you’re not alone. The good news is that the money you saved is still yours.
Taking a few minutes to review your account can help you understand any fees and decide what to do with your savings.
First, track down your old 401(k)
Start by logging in to your former employer’s retirement plan website. Don’t have the login details? Contact your old HR department or the plan administrator.
Find out how much is in the account, where it’s invested, what fees you’re paying, and whether you can leave it in the plan.
Know your options
After locating your account, you generally have four options:
- Leave it where it is, if your former employer’s plan allows it.
- Roll it into your new employer’s 401(k), if the new plan accepts rollovers.
- Roll it into an Individual Retirement Account (IRA), which often offers more investment choices.
- Cash it out, although taxes and an early-withdrawal penalty may apply.
Each option has trade-offs, so take the time to work through them before you decide.
Consider consolidating your retirement accounts
If you’ve changed jobs several times, you might have retirement savings spread across several accounts. Combining eligible accounts could mean fewer logins, fewer statements, and a clearer picture of what you’ve saved.
But fewer accounts don’t always mean lower fees or better investment options. Compare first.
Think twice before cashing out
When money is tight, that old 401(k) balance can look tempting. But withdrawing may mean paying income taxes. If you’re under 59½, you may also owe a 10% early-withdrawal penalty, unless an exception applies. You’ll also give up the chance for that money to grow over time.
If you’re unsure what to do, a pro-bono financial advisor can help you weigh your options at no cost.
Compare options before moving your money
Before making a move, look beyond the balance:
- Fees: What would you pay in account and investment costs?
- Investment choices: Are there options that fit your goals?
- Convenience: How easy is the account to manage?
- Features: What about guidance, online tools, customer support, or access to loans?
It’s good to know what you’re paying for.
Keep track of your retirement savings
Whatever you decide to do with your old 401(k), make sure your retirement plan providers have your current address, phone number, and email.
Keep a simple list of your retirement accounts, providers, approximate balances, and contact details. Check it once a year—tax season is an easy reminder—so no account gets forgotten.
Bottom line
Changing jobs is a good opportunity to review your retirement savings, not just your old 401(k). You don’t have to decide everything right away.
Start by finding your accounts and comparing your options. Then choose the approach that best fits your financial goals and circumstances.
