Are you leaving your old 401(k) behind? Here are the key steps you should follow to get it done. First, check your account value. If it’s over $7,000, you can leave it, roll it into an IRA, or your new employer’s 401(k). If below $7,000, decision-making may be limited. Next, decide whether to keep the money in a 401(k) or move it to an IRA. Assess the quality of your 401(k) options and find the right IRA provider if needed. Consider converting traditional 401(k) assets to a Roth account. Execute the rollover process carefully to avoid tax penalties.
If rolling over to an IRA, make sure the check is payable to the provider, not you, to avoid withholding taxes. Determine how to invest your assets in the new account, especially if it’s a target-date fund for simplicity. If you have multiple retirement accounts, a rollover can help you reassess your overall asset allocation strategy. Following these steps will ensure a smooth transition for your old 401(k) and help you make the most of your retirement savings.
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