When you retire or change jobs, you have new options for your old 401(k) that can provide continued potential tax-deferred growth opportunities. With a transition of this magnitude, it’s helpful to understand the steps in the process and have a checklist for guidance.


  • Contact your former HR department and understand your options
  • Consider the pros and cons of those options (See Below)
  • Consult a Financial Advisor and develop a retirement income strategy

Now let’s discuss your options. There are 3 main options you will be given the opportunity to evaluate:

1. STAY IN YOUR PLAN – If this is an applicable option, you…
  • can maintain the tax-deferred status, earn tax-free growth and avoid paying current taxes or penalties
  • will be limited to the investment choices in the plan
  • will be restricted to the withdrawal rules of the plan
 2. ROLL YOUR SAVINGS INTO A ROLLOVER IRA – This is the recommended option because you will…
  • maintain the tax-deferred status, earn tax-free growth AND avoid paying current taxes or penalties
  • be able to consolidate your retirement savings
  • add additional investment options
  • enjoy more flexible withdrawal options
  • potentially lower fees than traditional 401(k) plans
Investment costs and fees, outside accounts, and overall financial plan should be taken into consideration when evaluating an IRA rollover.

3. CASH OUT (NOT RECOMMENDED) – If you cash out your 401(k)…
  • there are immediate & significant tax consequences
  • there are most likely withdrawal penalties
  • you will have immediate access to the funds
  • you will have 60 days to complete a rollover

If you choose the recommended option of rolling over your old 401(k), use this step by step guide to help you through the process.


  1. Open a Rollover IRA with a trusted Firm
  2. Complete your Distribution Paperwork to do a DIRECT rollover to your new IRA
  3. Consult a Financial Advisor to develop a strategic retirement plan based on your personal financial situation
  4. Implement your new strategy and focus on disciplined investing