401k Calculator & Guide
Leaving an employer can give you several choices for your old 401(k). Learn what can happen to your account, how rollovers work, what to check before moving the money and how taxes can differ between your options.
When you leave an employer, your 401(k) does not automatically have to be cashed out. Depending on the plan and your circumstances, you may have several ways to handle the balance.
If permitted, you may leave your balance in the former employer's 401(k) and continue using the plan's available investments.
Review 401(k) Fees →If your new employer's plan accepts rollovers, you may be able to consolidate the old balance into the new workplace plan.
Rollover Guide →An eligible old-plan balance can generally be rolled into an IRA that accepts the rollover.
IRA Rollover →You can potentially receive the money instead of rolling it over, but taxes and possible additional tax can apply.
Withdrawal Guide →The available choice depends on the old plan, new plan, account balance and your circumstances. The table below shows the main structural differences.
| Option | Tax treatment | Investment choices | Employer contributions | Key point to check |
|---|---|---|---|---|
| Keep old 401(k) | Generally remains tax-deferred | Old plan's investment menu | Generally no new contributions from old employer | Fees and plan features |
| New 401(k) | Generally remains tax-deferred | New plan's investment menu | Eligible new employer contributions may apply | Whether the new plan accepts rollovers |
| Traditional IRA | Generally tax-deferred for a qualifying rollover | Depends on IRA provider | No employer match | Investment options and fees |
| Roth IRA | Traditional pre-tax money generally becomes taxable income when converted | Depends on IRA provider | No employer match | Conversion tax consequences |
| Cash distribution | Taxable amount generally enters income | Outside retirement account | None | Taxes and possible additional tax |
Often, yes — but the new employer's plan must permit rollover contributions. A retirement plan is not required to accept every type of rollover.
Ask the new plan administrator whether it accepts incoming rollovers and which account types it accepts.
Review administrative and investment-related fees in both plans before transferring assets.
Compare the available investment menu, fund expenses and other plan features.
Moving an eligible balance to the new plan can consolidate retirement savings into fewer workplace accounts.
Some workplace plans have features that may not be available in an IRA, so compare the actual plan documents.
Use the new plan's instructions for the correct receiving account, trustee and mailing details.
A direct rollover generally keeps the money moving between retirement accounts without paying it to you first.
Confirm the account balance, vested balance and distribution options with your former employer's plan administrator.
Identify whether the receiving account will be your new 401(k), traditional IRA or another eligible destination.
Verify that the old plan permits the distribution and the receiving plan accepts the rollover.
Ask the old plan to transfer the eligible balance directly to the receiving plan or IRA.
Save statements and tax documents showing the distribution and rollover.
The IRS describes two common ways an eligible distribution can be moved: a direct rollover or a distribution paid to you followed by a rollover within 60 days.
| Feature | Direct rollover | 60-day rollover |
|---|---|---|
| Who receives the funds? | Receiving retirement plan or IRA | You receive the distribution first |
| General timing | Transferred directly | Generally deposited within 60 days |
| 20% federal withholding | Generally no withholding on the direct transfer | Generally applies to taxable plan distributions paid to you |
| Replacing withheld money | Generally not needed | May be necessary to roll over the full gross distribution |
| Administrative steps | Generally simpler | Requires careful handling of the 60-day deadline |
The IRS states that when a retirement-plan distribution is paid directly to another retirement plan or IRA, no taxes are withheld from the transfer amount. If the eligible distribution is paid to you instead, mandatory withholding generally applies to taxable amounts.
Simply changing employers does not by itself make an eligible 401(k) balance taxable. Tax treatment depends on what you do with the distribution.
A qualifying direct rollover generally preserves tax deferral rather than treating the transferred amount as current taxable income.
An eligible distribution paid to you can generally be rolled over within 60 days, subject to the applicable rules.
Any taxable amount that is not rolled over generally must be included in income for the year of the distribution.
Changing jobs can make vesting important. Your own contributions are generally fully vested, while certain employer contributions may be subject to the plan's vesting schedule.
Employee contributions to a 401(k), including applicable earnings, are generally 100% vested.
Employer matching contributions may be subject to the vesting schedule specified by the plan.
Nonvested employer contributions can be forfeited when you leave, depending on the plan's terms and applicable rules.
Your plan's Summary Plan Description explains its vesting, distribution and rollover procedures. Ask the plan administrator for a copy if you do not have one.
Federal rules give plans additional options for smaller account balances after employment ends.
| Account balance | What may happen | What to check |
|---|---|---|
| More than $5,000 | The plan generally cannot force an immediate distribution solely because you left, subject to applicable plan rules. | Review the plan's distribution and rollover options. |
| $1,000–$5,000 | The plan may make an involuntary distribution and generally must automatically roll amounts above $1,000 into an IRA if you do not make another election. | Watch for notices from the former employer. |
| $1,000 or less | The plan may generally distribute the balance without your consent, subject to applicable rules. | Review the distribution notice and rollover deadline. |
Designated Roth 401(k) assets follow different rollover rules from traditional pre-tax 401(k) money.
Roth 401(k) Rollover →Mixed pre-tax and after-tax balances can require special rollover allocation treatment.
After-Tax Guide →An outstanding plan loan can create special distribution and rollover considerations when employment ends.
401(k) Loan →RMD amounts generally cannot be rolled over, so age and distribution status can matter when leaving a job.
RMD Guide →Converting traditional 401(k) money to a Roth IRA generally creates taxable income.
Roth IRA Rollover →Direct transfers can help avoid having the retirement distribution paid to you first.
Direct Rollover →Gather these details before contacting the old plan administrator.
Explore the complete rollover guide and available destinations.
Learn how to move an eligible 401(k) balance into an IRA.
Learn about Roth conversion tax treatment and rollover mechanics.
Explore options for an account from a previous employer.
Understand direct transfers between retirement accounts.
Learn about the 60-day rollover process and withholding.
Understand when rollover transactions can create taxable income.
Explore an illustrative rollover and withholding scenario.
Explore the rollover calculator and follow the dedicated guides for IRA rollovers, Roth conversions, direct transfers and old 401(k) accounts.
Clear guides, useful calculators and practical retirement resources to help you understand your 401(k), contributions, employer matching, Roth options, rollovers and long-term savings.
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