A 401(k) rollover moves retirement savings from a former employer's plan into an IRA you control. The best option — rollover IRA, Roth conversion, stay in plan, or roll to new employer — depends on your fees, investment options, tax situation, and age. SKG evaluates every option with your specific numbers. Never cash out.
Your 5 Options
Most popular option. A direct rollover to a traditional IRA preserves tax-deferred status, gives you vastly more investment choices, and typically lowers fees. You maintain full control and can consolidate multiple old 401(k)s into one account.
Rolling into a Roth IRA triggers income tax on the full amount now, but all future growth and withdrawals are tax-free. This can be powerful if you are in a low-income year or expect higher future tax rates.
If your old plan has excellent, low-cost investment options and you have over $5,000 in the account, leaving it in place is sometimes reasonable. You lose consolidation benefits and may have limited investment options.
If your new employer offers a 401(k) with good options, you can roll your old balance into it. This consolidates accounts but limits you to the new plan's investment menu.
Cashing out triggers income tax plus a 10% early withdrawal penalty if under 59½. A $100,000 cashout could cost $30,000-$40,000 in taxes and penalties — permanently destroying decades of compounding.
Need Help with a 401(k) Rollover?
We analyze your old plan's fees, compare investment options, and execute the rollover properly — at no cost for the initial review.
