What to do with an old 401(k)

When you leave a job, your 401(k) doesn't disappear. You usually have a few choices, and cashing out is usually the costliest.

Common options

• Leave it in the old plan, if allowed
• Move it to your new employer's plan, if it accepts rollovers
• Roll it into an IRA
• Cash it out: usually taxed, often with a penalty if you're under 59 and a half

Tips

• A direct rollover, where the money goes straight from one account to the other, avoids withholding problems
• Compare fees and investment choices before deciding
• Keep track of every old account; forgotten 401(k)s are common

General education only, not tax or investment advice. Nickel Gains isn't paid by any broker, fund company or adviser.