What To Do With Your Old 401k: Rollover, Cash Out, or Leave It?

Old 401(k) holders should avoid cashing them out, consider account balances, investment options, and rollovers to new plans or IRAs.

### Navigating Your Old 401(k): Essential Tips and Strategies
* 💼 401(k)s are powerful saving tools that can help you **achieve millionaire status**, making it crucial to **manage them wisely** after leaving an employer.
* 🚫 "Do not cash out your 401(k)!" This action can lead to a **10% penalty for those under 59 and a half**, plus taxes, significantly **reducing your savings**.
* 📊 Despite the risks, **41% of employees cash out their 401(k)s** when changing jobs, with **85% draining their entire balance**, which is a **major financial mistake**.
* 📝 If a former employer issues a forced plan distribution, you have **60 days to deposit that check** into an acceptable account to avoid penalties.
* 💰 If your old 401(k) balance is over **$7,000**, consider leaving it with your old employer to **maintain investment options** without the hassle of a rollover.
* 🔄 For balances under **$7,000** or if you're unhappy with investment options, rolling over to an IRA is often the **best choice for flexibility**.
* 📈 Regardless of your decision, ensure that you invest the funds rather than leaving them in cash, as **nearly 30% of rollovers remain uninvested for over a year**, losing value to inflation.
* 🏦 Lastly, when starting a new job with a 401(k), **maximize your employer match**, as it represents **free money** that can **significantly enhance your retirement savings**.

What To Do With Your Old 401(k)

Bring confidence to your wealth building with simplified strategies from The Money Guy. Learn how to apply financial tactics that go beyond common sense and help you reach your money goals faster. Make your assets do the heavy lifting so you can quit worrying and start living a more fulfilled life.

Subscribe today to stay up to date with our latest episodes, livestreams, and highlight videos: https://www.youtube.com/c/MoneyGuyShow?sub_confirmation=1

Are you ready to go beyond common sense when it comes to your money? Check out all the free resources The Money Guy Show provides: https://moneyguy.com/resources/



The Money Guy Show

Introduction to 401ks and the importance of managing them after leaving an employer.

401ks are valuable saving tools and often the first account where millionaires reach seven-figure status.

A 401k is a tax-advantaged, employer-sponsored retirement account.

Many people make mistakes managing their 401k after leaving an employer.

The biggest mistake to avoid: cashing out your 401k early.

Cashing out a 401k before 59 1/2 incurs a 10% penalty and taxes.

This significantly diminishes the savings accumulated.

A surprising number of people cash out their 401k when leaving a job, despite the penalties.

What to do with your old 401k and available options.

If the balance is over $7,000, you can leave it with the old employer.

This is a simple option that allows you to maintain existing investments.

Rolling over means transferring funds to a new eligible account.

If the balance is under $7,000 or you want more control, consider rolling over to an IRA or a new 401k.

The importance of investing rolled-over funds and maximizing employer match.

Many people leave rolled-over funds in cash, losing potential gains.

Contribute enough to your new 401k to get the full employer match, which is essentially free money.

A free flowchart is available online to help assess your 401k situation.