Individuals & Families

Job Change & Rollover

Understand what happens to your retirement accounts when you change jobs or retire — before you move anything.

Changing jobs or retiring often means deciding what to do with an old employer retirement plan. The options are broader than rolling it over — and the right choice depends on your full financial picture, not just the account itself.

Why This Matters

A rollover decision can affect taxes, fees, investment options, creditor protection, and required minimum distributions for years. Understanding the options before moving money helps you avoid irreversible mistakes.

Key Concepts

  • Former employer plans — what happens to your 401(k), 403(b), or TSP when you leave.
  • Leaving assets in the plan — when keeping your money in the old plan may make sense.
  • Rollover to IRA — transferring funds to an Individual Retirement Account.
  • Rollover to new employer plan — moving funds to your new employer plan.
  • Cash-out — the tax consequences of taking a distribution (often the least advantageous option).
  • Direct vs. indirect rollover — how the transfer is done affects taxes and withholding.
  • Liquidity — how accessible your money is in each option.
  • Tax treatment — how each option affects your tax situation now and in retirement.
  • Fees — comparing plan-level fees, investment expenses, and advisory fees.
  • Investment considerations — the range of investment options available in each option.
  • Creditor protection — ERISA and state-level protections vary by option.

Questions to Ask

  • Should I leave my money in my old employer plan, or move it?
  • What are the fees and investment options in each option?
  • What are the tax consequences of each choice?
  • Am I eligible for a direct rollover, and what paperwork is required?
  • How does each option affect my access to the money?
  • What happens to any employer stock or company match?
  • Are there required minimum distributions I should plan for?
  • How does this decision fit with my overall retirement and income plan?

Common Mistakes

  • Automatically rolling over without considering leaving assets in the plan.
  • Taking a cash distribution and triggering taxes and penalties.
  • Doing an indirect rollover and missing the 60-day deadline.
  • Not comparing fees and investment options before moving money.
  • Ignoring creditor protection differences between options.
  • Rolling over employer stock without understanding net unrealized appreciation rules.
  • Making a rollover decision in isolation from the rest of the financial picture.

How This Connects

A job change or rollover decision connects to your retirement income strategy, tax planning, and long-term accumulation plan. The right rollover choice depends on your timeline, income needs, investment preferences, and overall financial picture — not just the account itself.

Understand your options

Understand My Options

Konexo provides educational information and consulting. Konexo is not a law firm and does not provide legal advice, tax advice, or investment advice. Insurance, annuity, and financial products, where discussed, are offered through licensed persons or entities. Education does not automatically result in the purchase of any product. Understand your options first — implementation, when appropriate, is a separate decision.