What to do with your 401k — Leverage Retirement

If you left your employer and are curious about what to do with your 401k, this is the place to start. Here are the 3 options.

And like the nostalgic clown car at the circus, you have a whole team of experts available in that tiny chat bubble in the corner of your browser.

This is called a “rollover.” Rolling your money to another retirement account (like your next 401k, your own entrepreneur’s 401k, or an IRA) means you avoid the IRS saying you owe taxes on that nice nest egg of yours.
Withdraw the balance. You’ll pay taxes at the time you withdraw and likely owe a little more when you file your taxes.
20% minimum will be withheld for taxes at the time of your withdrawal
When you file your taxes, you may owe more depending on your tax bracket. There is also a 10% additional tax if you are under age 59.5 (scroll down for more on this).
You have the option to stay invested. Keep it where it is for now and keep that compounding growth going until you know your next move.

Often used incorrectly, “Rollover” is a technical term that means you are transferring money from one retirement account to another with no pitstops in a checking account. A rollover is the best way to stay clear of having your nest egg counted as taxable income when you do your taxes!
Another crazy technical term that simply means you are withdrawing your retirement money and intend to keep it in a non-retirement account to spend at will. Taking money in “cash” means this money will be counted as taxable income when you do your taxes, so you may owe more in taxes.
This fancy word means “withdrawal” and you can do a “cash distribution” or a “rollover distribution.”
The government prefers to call this a “10% additional early distribution tax.” Designed to guide people to protect their savings rather than spend. Generally, you’re “early” if you have not reached age 59.5 (Yep. Age 59 and 1/2)