What to do with 401K when changing job

Whether you're leaving the job yourself or you're being fired by the employer, you should consider what to do with your 401K

Option 1:  Transfer old 401K to new employer’s 401K

The option is to transfer your 401K money directly from the old company to the new company's 401K.

Advantages

1.     Your money is summarized together into an account for easy management. You have a clear understanding of all the money, what is return, allocate in which investment products, and each of the performances is easier to manage.

2.     If your new company's 401K choice is great, it's all good fund that you can't buy outside, return high, fee low, then congratulations pro. This choice is great!

3.     The money is in the same 401K account, it would be convenient to borrow.

Disadvantages

The biggest drawback is that all 401K disadvantages are limited investment options. If your new owner's 401K isn't as good as the one above, then you've concentrated all your money on the account with limited investment options.

Option 2: Transfer Old 401K to Traditional IRA

Advantages

1.     Turn it out into your own Traditional IRA account and you'll have full control over the money yourself. As long as you open your account in the broker account has enabled this option.

2.     Transfer to the General IRA won't have any tax issues.

Disadvantages

You cannot borrow money from IRA. So if you want to borrow, you need to transfer the money to the new employer's 401K. Because when you leave your old company, if you still have a 401K that you haven't paid off, you need to pay it back. And if you leave the money in your old home, you won't be able to borrow it again.

Option 3: Transfer 401K to Roth IRA

Advantages

As with all IRAs, when money is transferred to a Roth IRA account, you have full control over your investment.

Disadvantages

1.     Since it's Roth, Money transferred from 401K to Roth IRA is subject to tax on the current year's income. So if you have a lot of 401K money, you still need to make reasonable arrangements.

2.     Like all IRAs, Roth IRA can't borrow.

Option 4:  Make no change to old employer's 401K

Advantages

Unless your old owner's investment choices are great. It's so good that you don't want it. Perhaps the only benefit is that you are too lazy.

Disadvantages

the 401K account can easily be forgotten. And you won't receive new investment options and various information updates from the company as you did in your original job. And 401K accounts are accompanied by fee. You can take a closer look at your investment options for the contract to see how much fee is.

The 401K's greatest advantage is borrowing money yourself has also been lost. When you leave a company, you can't continue with you or take loan. Well, after each of the pros and cons, the parents are not aware of each option. If you choose not to move, or force out of the house. There's no need to look down there any more.  When you Transfer 401K, the best way is to let the old company send a check directly to the new company. Alternatively, the check can be given to you first and you can deposit it with the new company. But the title of the check can't be your name. Must be the name of the new management company. This is called Trustee to Trustee Transfer. The money doesn't go through your account. In other words, you don't have any right to use the money in the process of transferring money.

what if you write your name on it?

The IRS requires that if a check is belonging to an individual, then it must be deposited in a new IRA or 401K account within 60 days. Otherwise, it will be counted as the income of the year, plus a 10% fine