What should I do with my 401(k) when I retire or change jobs?
When you leave a job or retire, your 401(k) does not have to move, but the choice you make can cost or save you real money. Here is how to think it through, with fee-only, fiduciary advice.
The rollover decision is easy to get wrong and easy to get right with help.
Old 401(k)s tend to end up scattered across former employers, and sometimes one gets cashed out and loses a chunk to taxes and penalties. Both are avoidable. We look at your specific plan, your fees, and your goals, then handle the move the right way, so the account keeps working for you.
We help you figure out what to tackle first and stay with you for every decision after that.
Nick George, CFP®, ChFC®, CLU®, IWA™ | Founder
When you retire or change jobs, you generally have four options for your old 401(k): leave it where it is, roll it into an IRA, move it into your new employer's plan, or cash it out. Each has real consequences for your taxes, fees, investment choices, and how easily you can manage the money. Cashing out is almost always the costliest, because of taxes and penalties, and the best choice depends on your plan's fees, your other accounts, and your bigger retirement plan. We help people make this decision every week, and we handle the paperwork so nothing gets stranded or taxed by accident.
Leave it in the old plan
You can often leave the money where it is, which keeps things simple and may make sense if the plan has strong, low-cost funds or special features. The downsides are another account to track, limited investment choices, and less flexibility for withdrawals in retirement. We help you weigh whether staying put serves you.
Roll it into an IRA
Rolling into an IRA can give you more investment choices and one place to manage the money, which makes retirement withdrawals and planning easier. Costs vary, so we compare them with your plan's. A direct rollover avoids any tax. We handle the transfer so it is done correctly, and we make sure it fits the rest of your plan.
Move it to your new employer's plan
If you are changing jobs and your new plan is strong, consolidating there can keep things simple and, in some cases, preserve useful features. We compare the new plan's fees and options against an IRA so you move the money to wherever it works hardest for you.
Think twice before cashing out
Cashing out an old 401(k) triggers income taxes and, if you are under 59 and a half, usually a 10 percent penalty, and it removes money that was meant to compound for decades. It is rarely the right move. We help you find better options and, where a real cash need exists, plan around it with far less damage.
What this can look like
Illustrative examples, not actual clients, and not a promise of results.
The scattered accounts
Someone changing jobs for the third time has three old 401(k)s they have lost track of. We consolidate them into one IRA and give them a single, clear account to manage.
The retiree's rollover
A new retiree rolls a large 401(k) into an IRA so they can build a tax-smart withdrawal plan and invest the way their retirement plan calls for, all in one place.
The avoided cash-out
A worker between jobs is about to cash out a $60,000 401(k) to bridge a few months. We show the tax and penalty cost, find a better short-term plan, and keep the retirement money growing.
How we work with you
We lead families through their biggest money decisions and show them what’s possible. We start by learning what matters to your family, then stay in your corner as life changes, with one plan that covers your investments, taxes, insurance, and estate. Pick your two money questions.
Why fee-only and fiduciary matters
Fee-only means the only pay we receive comes from the families we work with, so the advice stays about you. Fiduciary means we are legally bound to act in your best interest, at all times. We work with clients in Columbus, across Ohio, and nationwide, and everything can be done virtually.
Common questions
What are my options for an old 401(k)?
Four: leave it in the old plan, roll it into an IRA, move it to your new employer's plan, or cash it out. The right choice depends on your plan's fees and features, your other accounts, and your retirement plan. Cashing out is usually the most expensive because of taxes and penalties.
Should I roll my 401(k) into an IRA?
Sometimes. An IRA can offer more investment choices and one place to manage the money, and a direct rollover avoids taxes. Some 401(k)s have very low costs or features worth keeping, so we compare your specific plan before anything moves. If we would manage the IRA, we earn a fee on it, and we tell you that up front.
Will I pay taxes if I move my 401(k)?
Not on a direct rollover, where the money moves straight from one account to another. You would owe taxes, and often a penalty, only if you cash out. We make sure the transfer is done as a direct rollover so nothing is taxed by accident.
What happens to my 401(k) when I leave my job?
In most cases nothing automatic, you can leave it, and you also have the option to roll it to an IRA or your new plan. It is a good moment to consolidate old accounts and lower fees. We handle the paperwork so nothing gets stranded.
Can I still do this if I already retired?
Yes. Many people roll a 401(k) into an IRA at retirement so they can build a withdrawal and tax plan in one place. We help retirees make the move and then turn the account into steady income.
Do you help with this if I am not in Ohio?
Yes. We are in Columbus and help people nationwide, virtually. Fee-only and fiduciary means our advice on your rollover is about you.
Not sure what to do with your 401(k)? Let's talk it through.
This page is general information for people exploring our services and is not investment, tax, or legal advice or a recommendation for any specific person or situation. The examples are illustrative, are not based on actual clients, and are not a promise of results. Strategies such as S-corp elections, backdoor and mega-backdoor Roth contributions, equity-comp decisions, and deferred compensation depend on your specific situation and current law, so confirm the details with a qualified professional before acting. ClearMind Capital LLC is a registered investment adviser; registration does not imply a certain level of skill or training. Past performance is not indicative of future results.
