Marino on Money: June 2
If you are out of a job, or changing jobs, you will want to have a plan for your 401k. In tonight’s Marino on Money, Ross has a few options.
I just left a job. What should i do with my 401(k)?
You have three options. You may leave it at your previous employer, roll it over to another retirement account, or cash it in. Let’s look first at leaving it where it is.
If there is less than $5,000, your employer has the option of either distributing the account to you or automatically rolling it over to an IRA for you. In both of these circumstances, the employer can do this unless you tell them not to. This is your money, so don’t be passive. It is up to you to call either your employer, or the toll free number on your 401(k) statement. Ask what your options are, and be sure to check with your tax advisor first.
The second option is rolling it over. This is where you roll, or transfer, the money from your previous 401(k) to another retirement account. If done correctly, there will be no taxes due. Sometimes this is done electronically, which makes it easy. Or an actual check may be sent to you. If this happens, don’t cash the check if you are planning on a rollover. You need to send the check to the new retirement account.
If you want to cash the check, you need understand the consequences. We will discuss that tomorrow.
If you have a financial question for Ross, you can use the Marino on Money page.
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