Job Change Retirement Savings Options

Choices

Leave your money in your former employer’s plan

Potential Advantages

You can keep your money growing tax-deferred.
You may be able to get loans or hardship withdrawals.

Potential Disadvantages

There may be a limited number of investment options.
Managing your assets across multiple plans or accounts could be difficult.

Choices

Move your money into your new employer’s plan

Potential Advantages

Your new plan may allow for a loan or hardship withdrawal.
There is no income tax or penalties with a direct rollover.

Potential Disadvantages

Your new employer’s plan may not accept rollovers.
Your withdrawal options may be limited.

Choices

Rollover your money into an IRA

Potential Advantages

The type of IRA you choose may mean there is no income taxes or penalties.
There may be a broader range of investment options.
Consolidating money into one IRA can give you a clear picture of retirement assets.

Potential Disadvantages

You cannot take a loan from an IRA.
Some IRA investments may include trading expenses, such as commissions and fees.
There are no penalty-free withdrawals prior to age 59½, though there are some exceptions.

Choices

Withdraw your money in cash

Potential Advantages

You get immediate access to your cash. If you withdraw after age 55, it may be penalty-free.

Potential Disadvantages

Twenty percent federal income tax will apply; state taxes may also apply.
There’s a potential 10% early withdrawal penalty, if you are under age 59½.
You could potentially lose tax-deferred, long-term growth.

Choices Leave your money in your former employer’s plan	Potential Advantages You can keep your money growing tax-deferred. You may be able to get loans or hardship withdrawals.	Potential Disadvantages There may be a limited number of investment options. Managing your assets across multiple plans or accounts could be difficult.
Choices Move your money into your new employer’s plan	Potential Advantages Your new plan may allow for a loan or hardship withdrawal. There is no income tax or penalties with a direct rollover.	Potential Disadvantages Your new employer’s plan may not accept rollovers. Your withdrawal options may be limited.
Choices Rollover your money into an IRA	Potential Advantages The type of IRA you choose may mean there is no income taxes or penalties. There may be a broader range of investment options. Consolidating money into one IRA can give you a clear picture of retirement assets.	Potential Disadvantages You cannot take a loan from an IRA. Some IRA investments may include trading expenses, such as commissions and fees. There are no penalty-free withdrawals prior to age 59½, though there are some exceptions.
Choices Withdraw your money in cash	Potential Advantages You get immediate access to your cash. If you withdraw after age 55, it may be penalty-free.	Potential Disadvantages Twenty percent federal income tax will apply; state taxes may also apply. There’s a potential 10% early withdrawal penalty, if you are under age 59½. You could potentially lose tax-deferred, long-term growth.