Left Your 401K at an Old Job? What To Do & The Questions You're Not Asking

So, you’re like most people today and are holding onto multiple 401Ks. It’s okay.

Most of us jump jobs more often than in previous decades and when that happens you free up (and often leave) your 401K.

It’s a pain to deal with the old 401K because you have so many other things going on with your new job, life happens, and suddenly you have a collection of 401K souvenirs.

What are your options? How awkward is that phone call to your old company going to be?

Let’s talk about the old 401Ks and what’s left to do now.

a behind the scenes look at company 401k’s

Most people know what it’s like to invest in a 401K but don’t see what it’s like behind the scenes to create a 401K.

Let’s peel back the curtain.

Here’s a little secret: there was a cost for the company to set up and maintain the 401K. They want you to leave. They don’t want you in the 401K.

If you leave a company, they are not incentivized to keep your 401K, and because of that you often have penalties for staying even if you don’t recognize there are penalties.

Oh…. so… don’t move it and avoid the penalties? NO.

The WHY and the WHAT

Why Should you Move Your Money Out Of Your Old 401Ks

  1. It gives you flexibility. (ALWAYS A GOOD THING.) Money in a 401K is less flexible than money in an IRA.

  2. It gives you momentum. If you feel like you’re not moving anywhere, that will slow down your progress. You never look at progress your making because you’re getting so many statements in the mail!

  3. It gives you control over your risk over time. It’s hard to judge the risk you’re taking when you have 5 accounts sitting out there.

What Should you do with Your 401k Money?

Most companies—but not all—allow you to keep your retirement savings in their plans after you leave. You can:

  1. Keep it with your old company (We’re suggesting other options.)

  2. Roll over the money into an IRA.

  3. Roll over your 401(k) into a new employer's plan.

  4. Cash out.

It’s an incredibly simple yet impactful step to consolidate your old 401Ks! You aren’t helping yourself by having multiple, small accounts out there.


So How Do You Do move your 401k? what’s the best option for me?

The obvious answer is you can reach out to your former employer and they will direct you.

But building a plan for the future is more strategic than moving your 401K from one company to the next, and while it is a start it is a strategic plan. Your 401K can play a key role in your financial future, but we like to view it as a tool the combines with every aspect of your finances.

If you’ve never made a comprehensive, flexible financial plan. That is what we do.

We focus on your dreams and build a dynamic strategy that allows you to live your best life and stay on track to reach your dreams.

Don’t let your 401K sit and not be a part of your bigger strategy. Time is one of the most valuable components of financial growth. The sooner you have a strategy the better.