It depends on your goals, investment preferences, and how much control and flexibility you want over your retirement savings. Both options can make sense, but they serve different purposes.
Option 1: Roll your 401(k) into an IRA
Rolling your 401(k) into an IRA often provides greater flexibility and personalization.
Potential advantages:
- More investment choices beyond the limited fund lineup of most employer plans
- Consolidation of multiple retirement accounts into one place
- Potentially lower costs depending on the IRA custodian and investments selected
- Greater flexibility for withdrawals, Roth conversions, and estate planning
- Ongoing professional management if working with an advisor
Things to consider:
- IRAs may have less creditor protection than 401(k)s in some states
- Rolling funds incorrectly could trigger taxes or penalties (a direct rollover avoids this)
Option 2: Leave your 401(k) with your former employer
Keeping your assets in the existing plan can still be a viable choice.
Potential advantages:
- Strong creditor protection under federal law
- Access to institutional-priced investment funds that may not be available in an IRA
- No immediate action required
- If you left your job at age 55 or older, you may retain penalty-free access to funds (the Rule of 55)
Things to consider:
- Limited investment options
- Less flexibility for future planning
- No longer eligible to contribute to the plan
- Less proactive oversight
Other option: Roll into a new employer’s plan
If your new employer allows it, rolling your old 401(k) into a new 401(k) can help consolidate accounts while maintaining plan-level protections.
Which option is right for you?
The right decision depends on factors such as:
- Your age and retirement timeline
- Investment preferences and cost sensitivity
- Need for flexibility or income planning
- Tax strategy and estate planning goals
One of our financial professional can help you compare these options and ensure the rollover is handled correctly and tax-efficiently.
Don’t leave this decision to chance. Our firm specializes in helping individuals optimize retirement assets after a job change. Book a strategy call today to get clear guidance, avoid costly mistakes, and put your retirement savings to work with a plan built around your goals.

