Here's What Happens When You Don't Roll Over Your 401(k)
Here's What Happens When You Don't Roll Over Your 401(k)
by Maurie Backman | Published on April 25, 2023
Key points
When you leave a job, you may have the option to keep your money in your old 401(k).
If you don't roll that 401(k) into a new one or an IRA, you might lose track of your money or leave it invested in assets that don't serve you well.
Many companies offer the benefit of a 401(k) plan, and it's a good option to take advantage of. Often, when you contribute money to a 401(k), your employer will match your contributions to some degree, allowing you to grow your long-term savings nicely.
But you may reach a point when you're ready to leave your job. You may, upon getting a new job, have the option to leave your 401(k) where it is rather than roll it over into an IRA or a new 401(k) plan. But that's not necessarily your best choice.
The problem with leaving your 401(k) where it is
Often, as long as your balance meets a certain threshold, you'll be allowed to keep your money in an old 401(k) even if you're no longer employed by the company sponsoring it. But if you leave your money alone rather than roll it over, a couple of bad things might happen.
First, you might forget that money exists. Capitalize, a service that helps people recover old 401(k)s, estimates there are more than 25 million "orphaned" 401(k) accounts that have been left behind at a former employer and forgotten about.
To continue reading, please go to the original article here: LINK