With so many factors to take into account, changing employers may be a difficult and time-consuming process. Your retirement savings account, or 401k, is one crucial matter. While transferring your 401(k) to the new job may seem like an intimidating task, it doesn’t have to be complicated if you know what steps are necessary for a successful transfer. Here’s what you need to know when changing employers and moving funds in your 401k.

Prior to switching employers, be aware of the various transfer options. The best option when transferring money between plans is usually a straight rollover, which enables you to move money from one qualifying plan (such as a regular IRA or Roth IRA) directly into your new employer’s retirement plan without paying any fees or taxes on the distribution amount. Indirect rollovers are another type of transfer that let you keep the assets that are transferred out, but they come with some risks because you have 60 days to deposit the funds into another eligible plan after receiving them; if you don’t, taxes and penalties may apply to the money that was distributed outside the plan.

Straight Rollovers: Moving Funds Directly to Your New Employer’s Plan

The rollover must then be performed properly and accurately. It’s crucial to keep track of all forms, paperwork, and conversations throughout the transfer process in order to assure success. This can include asking your existing insurance provider for details and sending paperwork to your new workplace. Verify that all of the information is accurate on both sides, including the account holder’s name, address information, and other crucial information like your Social Security number. It’s also crucial to keep in mind that before you can transfer money to a new company, your current account custodian will need to execute your request, so plan appropriately and give them enough time to do this.

You’ll also want to be mindful of any fees associated with the transfer, such as account closing costs or administrative fees that may be incurred when moving funds from one 401k to another. Be sure to check with your current and new plan custodians to understand any applicable charges that you might owe. 

Finally, it’s always a good idea to work with a financial advisor who can offer insightful advice on any financial decisions you’re thinking about. They will be able to assist you in weighing your options, respond to inquiries, and offer suggestions on how to arrange the transfer of funds between employment.

Transferring your 401(k) to a new employer doesn’t have to be a difficult process. You will be well on your way to a successful switch as long as you understand the types of transfers available, keep track of all documents and fees associated with the transfer, and work with an experienced financial advisor.

Working with a Financial Advisor for Guidance and Support

At Gainspoletti Financial Services, we offer time-tested advice on how to navigate through these options. We’re here for you when it comes to managing your 401(k) plan and making sure it’s as easy as possible for you to take care of business while you’re at your new job. 

Schedule a call today!