401k Calculator & Guide
Changing jobs does not mean you have to cash out your retirement savings. Depending on your account, plan rules, and circumstances, you may be able to leave your money in your former employer's plan, move it to a new workplace plan, roll it into an IRA, or take a distribution. Understand the options before making a decision.
The right next step depends on the former plan's rules, the balance in your account, your new employer's plan, investment choices, fees, and whether you need access to the money. Compare the available choices before requesting a distribution.
If the plan permits it, you may be able to keep your account invested where it is. Review investment options, ongoing fees, distribution rules, and whether you can continue managing the account online.
Consider: You may retain familiar investments, but you will still have to manage an account with a former employer. Small balances can be subject to special plan distribution rules.
Your new employer's plan may accept eligible rollovers. This can help consolidate workplace retirement savings, but acceptance, investment options, fees, and plan protections vary.
Consider: Confirm that the new plan accepts your type of balance and ask how the rollover will be processed.
An eligible rollover to a traditional IRA can preserve tax-deferred treatment for qualifying pretax money. A Roth IRA may be an option for certain rollovers, but moving pretax money to a Roth account generally creates taxable income.
Consider: Compare investment costs, services, withdrawal rules, and creditor protections before choosing an IRA.
You may be eligible to withdraw some or all of your vested balance, subject to plan terms. A taxable distribution can reduce the money left for retirement and may trigger income tax and an additional early-distribution tax.
Consider: Understand the net amount you could receive after withholding, taxes, and any applicable penalty before deciding.
Your account balance and your vested balance may not be the same. Your own salary-deferral contributions are generally fully vested. Employer matching or other employer contributions may be subject to a vesting schedule, depending on plan rules and applicable law.
Your traditional and Roth salary-deferral contributions are generally always 100% vested. Investment gains and losses affect their value, but the contributions are not subject to an employer vesting schedule.
Employer matching or other employer-funded contributions may vest over time. Check your statement and plan's vesting schedule to understand what you keep if you leave.
A rollover moves eligible retirement money from one account or plan to another. The tax result depends on the source account, destination account, type of money, and how the transfer is handled.
Check whether your account contains traditional pretax money, designated Roth money, or other after-tax amounts. Different portions may have different rollover destinations and tax treatment.
Ask the new employer's plan administrator or IRA provider whether the account accepts the specific rollover you intend to make.
When available, a direct rollover sends eligible funds from the former plan to the receiving plan or IRA. This can reduce the risk of missed deadlines and withholding issues associated with receiving the money personally.
If an eligible distribution is paid to you instead of transferred directly, a rollover generally must be completed within 60 days to qualify for rollover treatment. Special rules or relief may apply in certain circumstances. Confirm the rules before receiving funds.
Keep the transaction confirmations and tax forms. Check that the funds arrived in the correct account and review how the receiving account is invested.
Leaving a job by itself generally does not make your 401(k) balance taxable. Tax consequences usually depend on what you do with the account afterward and whether the transaction qualifies for rollover or other tax treatment.
| Action | General tax consideration | What to check |
|---|---|---|
| Leave the account in the former plan | Generally no immediate tax merely because employment ends. | Plan terms, account fees, and distribution rules. |
| Eligible direct rollover to a traditional IRA or accepting plan | Generally avoids current taxation when properly completed and eligible. | Eligible amounts, account types, and receiving plan requirements. |
| Rollover to a Roth IRA | Pretax amounts converted to Roth generally count as taxable income. | Tax impact, account type, and any after-tax amounts. |
| Cash distribution | Taxable amounts are generally included in income. An additional 10% early-distribution tax may apply unless an exception qualifies. | Age, distribution type, exceptions, withholding, and state tax. |
The 10% additional tax is separate from regular income tax and does not apply to every distribution. Certain exceptions can apply, and the rules may differ between an employer plan and an IRA. Do not assume that a hardship or financial emergency automatically eliminates the additional tax.
Some plans have special procedures for accounts below specified balance thresholds. Depending on the plan and applicable law, a small balance may be distributed or automatically rolled into an IRA if you do not make an election. The thresholds and procedures can change, so read the notice carefully.
Check off each step as you review your retirement account.
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A distribution can reduce retirement savings and may trigger income tax and an additional early-distribution tax. Estimate the potential consequences before deciding.
The total account balance may include employer contributions that are not fully vested. Confirm the amount you are entitled to retain.
Traditional, Roth, and after-tax amounts may be treated differently. Confirm that the receiving account can accept each portion correctly.
Keep records of former plans and make sure your contact information is current so you can receive notices and manage the account.
No. Your own contributions are generally fully vested, and you retain vested employer contributions. The plan's rules determine what happens to the account and any unvested employer contributions.
Often, yes, if the plan permits it and your account meets applicable requirements. Small balances may be subject to special distribution or automatic-rollover rules. Ask the plan administrator what applies to your account.
It depends on whether the new plan accepts rollovers and how its fees, investments, services, distribution rules, and protections compare with your former plan and IRA alternatives. Compare the details before deciding.
Eligible distributions can generally be rolled into an IRA. The process and tax treatment depend on the source account and the type of IRA. A direct rollover can help reduce the risk of withholding and missed deadlines.
A properly completed eligible rollover to a compatible traditional retirement account generally avoids immediate taxation on the eligible amount. A rollover or conversion of pretax money to a Roth account generally creates taxable income. Other rules may apply to after-tax amounts.
You may be eligible for a distribution under the plan's rules, but taking cash can have tax consequences. Taxable amounts are generally included in income, and an additional 10% tax may apply to an early distribution unless an exception qualifies.
Your vested employer contributions generally remain yours. Unvested amounts may be forfeited under the plan's vesting schedule and applicable rules. Check your latest statement and plan documents for the exact amount.
If an eligible distribution is paid directly to you and you want to roll it over, the general rollover deadline is 60 days from receipt. Direct rollovers are handled differently. Exceptions and special rules can apply, so confirm the requirements before taking a distribution.
The account may remain in the former employer's plan if permitted. However, a plan may have procedures for small balances, including distribution or automatic rollover. Read plan notices and keep your contact details current.
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