Four real options. None of them is universally right. This page walks through the actual trade-offs.
This page is educational. It does not recommend a rollover. A rollover decision depends on facts specific to you and should be made after reviewing the differences with a qualified professional.
Often permitted if the balance is above a plan-specific minimum. Keeps existing investment lineup and institutional pricing. May limit flexibility on distributions, beneficiary rules, and communication.
Consolidation. Continued qualified-plan protections and (in many plans) loan availability. Requires the new plan to accept rollovers — most do, but not all.
Wider investment selection and more distribution flexibility. Different fee structure — sometimes lower, sometimes higher than the plan. Different creditor protection rules than an ERISA plan. Different rules for age 55 separations.
Cash in hand, but the entire distribution is generally taxable. If under age 59½ and not otherwise eligible for an exception, an additional 10% tax may apply. Rarely the right answer — but sometimes it is.
Split rollover: keep part in the plan for the age-55 rule or NUA on employer stock, roll the rest to an IRA. Combinations get overlooked because they take more work — and are often the right answer.
The right choice usually turns on a small number of factors. All of them should be compared in writing before deciding.
When an advisor recommends rolling a 401(k) into an IRA, that advisor is often compensated on the resulting account. That is a material conflict of interest and it changes how the recommendation should be made and disclosed.
Austin’s approach: written comparison of the plan option vs. the IRA option, in the specific facts of your situation, with fee and service differences documented, before any recommendation is made. Sometimes the answer is to leave the balance in the plan. That answer is offered when it’s the right one.
Thirty-minute conversation. We look at the plan you’re leaving, the options available, and what actually fits your situation. An introductory conversation does not create an advisory relationship.
Review Your 401(k) Options