- You wisely invested in a 401(k) plan with your employer before parting ways. But your 401(k) is still sitting with your previous employer, which is no longer contributing to the plan. The best thing to do is to take that money and roll it over into a plan to which your new employer contributes money.
- You have several options available if you plan to roll over your 401(k). You can move your 401(k) funds into an IRA or your new employer's plan, once you become eligible. You will then need to request the rollover forms and instructions from your new plan. Notify your old plan of your rollover request and tell them to whom to make out the check. This will be the trustee of your new 401(k) or IRA, but not you. Therefore, the old 401(k) money is moving into another 401(k) plan but is not truly being withdrawn.
- Since you are rolling over the entire amount, there is nothing to be penalized or taxed.
