Free tool · Four questions
401(k) Rollover Options Checker
Answer four quick questions and see which of the four paths for your account are typically available — and the specific rules to watch for each.
Free tool · Four questions
Answer four quick questions and see which of the four paths for your account are typically available — and the specific rules to watch for each.
This shows the options and rules that typically apply — the plan document has the final word, and nothing here is a recommendation. Nothing you select is submitted or stored.
1. Your status with the employer whose plan this is
2. Your age
3. Approximate balance in this account
4. Does the account hold your employer’s company stock?
“Typically” is doing real work here: plans set their own distribution, roll-in, and withdrawal provisions in the plan document. Confirm against the Summary Plan Description before acting.
After you leave, a plan can cash out balances under $1,000 automatically (check mailed, 20% withheld) and can force balances between $1,000 and $7,000 into an IRA of the plan’s choosing — typically parked in conservative, low-yield holdings. SECURE 2.0 raised the force-out ceiling to $7,000 in 2024. Small old accounts reward fast action.
Between 55 and 59½ (having left in or after the year you turned 55), money in the old employer’s plan can be withdrawn penalty-free — but an IRA rollover permanently forfeits that. See the age checker.
Company stock in a 401(k) can qualify for Net Unrealized Appreciation treatment: take the shares as an in-kind distribution and the growth is taxed later at capital-gains rates instead of ordinary rates. Rolling the shares into an IRA erases that option forever. If question 4 was “yes,” get tax advice before moving anything.
Leaving an employer generally makes a plan loan due. If it isn’t repaid, the balance becomes a “loan offset” distribution — taxable, penalized if you’re under 59½, unless you contribute the amount to an IRA by your tax-filing deadline (including extensions) for that year, a deadline the 2017 tax law extended from 60 days.
At RMD age (73, or 75 if born 1960+), each year’s required distribution must be taken before any rollover — RMDs themselves can never be rolled over. And rolling a current employer’s plan to an IRA ends the “still-working” RMD deferral.
Employer plans are shielded by federal ERISA protection, essentially without limit. IRA protection comes from federal bankruptcy law (capped, for contributory IRAs) and state law outside bankruptcy — rollover IRAs keep strong protection, but the framework changes. Relevant for business owners and anyone with liability exposure.
(1) Leave it in the former employer’s plan, (2) move it into a new employer’s plan that accepts roll-ins, (3) roll it into an IRA you choose, or (4) cash it out. Each differs in taxes, penalties, investment menu, fees, creditor protection, and RMD treatment — and the right answer genuinely differs by person, which is why blanket “always roll to an IRA” advice is wrong.
Above $7,000, generally no — you can stay (though former employees sometimes pay administrative fees active employees don’t). At $7,000 or below, yes: automatic cash-out under $1,000, automatic IRA transfer from $1,000 to $7,000.
A direct rollover is tax-free, doesn’t count against annual contribution limits, and most custodians charge nothing to receive it (the old plan may charge a modest closing fee). It also isn’t “locked in” — money in a rollover IRA can usually be rolled into a future employer’s plan later if that ever helps.
Typically two to four weeks end to end: open the receiving account, request the direct rollover from the old plan (some administrators require a phone call or notarized form), then invest the funds when they land — money often arrives as cash and sits uninvested until you place it.
Considering option 4? See its full price in tax and penalties first.
Run the numbers →Deciding between plan and IRA often comes down to all-in cost.
Compare fees →The complete decision framework, with the four options side by side.
Read the guide →These tools show you the rules. A no-cost, no-obligation consultation walks through how they apply to your specific accounts — before you sign anything.
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