Convenience
STAY IN PLAN
A minimum balance requirement of $5,000 might be required. You can maintain your current investments, and you don’t need to take further action.
ROLL OVER TO IRA
Enables you to manage your retirement assets in one location.
- View your overall financial picture in one place.
- Reduce number of statements and other communications.
ROLL OVER TO NEW EMPLOYER'S PLAN
May involve a waiting period.
You may be able to consolidate your retirement savings in your new plan.
CASH OUT
Provides immediate access to your retirement plan assets.
Tax Advantages and Disadvantages
STAY IN PLAN
Keeps your assets tax-deferred (not taxable until you access your savings).*
ROLL OVER TO IRA
Assets are tax-deferred (meaning not taxable until you access your savings).*
ROLL OVER TO NEW EMPLOYER'S PLAN
Assets are tax-deferred (meaning not taxable until you access your savings).*
CASH OUT
Removes potential for continued tax-deferred or tax-free growth of your assets.
Mandatory 20% withholding on distribution and state withholding, depending on the state, may apply. May be subject to 10% additional tax for early withdrawalif you are under the age of 59½ (some exceptions apply, please contact a tax professional).
Access to Money
STAY IN PLAN
If your plan offers loans, they are typically only available for active employees.
Generally allows for penalty-free withdrawals if you retire the year you turn 55 or older. Otherwise, penalty-free withdrawals are available after age 59½.
Waive early IRS distribution penalties if certain requirements are met, regardless of age. Some examples include unreimbursed medical expenses, disability, and qualified military reservists called to active duty.
ROLL OVER TO IRA
No loan provisions.
Withdrawals available without penalty after age 59½.
Waive early IRS distribution penalties if certain requirements are met, regardless of age. Some examples include unreimbursed medical expenses, disability, higher education expenses, first-time home purchase, and qualified military reservists called to active duty.
Must begin taking required minimum distributions (RMDs) in the year which you turn 70½ (if you reached 70½ on or before 12/31/19) or 72 (if you haven’t reached 70½ on or before 12/31/19).(RMDs are not required for Roth IRAs if you are the original owner).
ROLL OVER TO NEW EMPLOYER'S PLAN
Loans may be available.
Generally allows for penalty-free withdrawals if you retire the year you turn 55 or older. Otherwise, penalty-free withdrawals are available after age 59½.
Possible to delay taking RMDs if you are still working.
Waive early IRS distribution penalties if certain requirements are met, regardless of age. Some examples include unreimbursed medical expenses, disability, and qualified military reservists called to active duty.
CASH OUT
Allows immediate access to your retirement plan assets.
Investment Choices
STAY IN PLAN
Limited investment options.
Offers familiar investment options.
May provide access to company stock or other investment options not available outside of the plan.
ROLL OVER TO IRA
Access wider range of investment options.
Consult a tax professional to determine the appropriate strategy if plan investments include company stock.
ROLL OVER TO NEW EMPLOYER'S PLAN
Investment choices limited to those in the plan.
May provide access to company stock or other investment options not available outside in the plan.
CASH OUT
N/A
Future Contributions
STAY IN PLAN
Future contributions not permitted.
ROLL OVER TO IRA
Future contributions allowed.
ROLL OVER TO NEW EMPLOYER'S PLAN
Future contributions allowed.
CASH OUT
Future investing would require opening an IRA or taxable account.
Expenses and Services
STAY IN PLAN
Compare the fees, expenses, and services associated with each option including staying in plan, rolling over to an IRA, or rolling over to your new employer's plan.
ROLL OVER TO IRA
Compare the fees, expenses, and services associated with each option including staying in plan, rolling over to an IRA, or rolling over to your new employer's plan.
ROLL OVER TO NEW EMPLOYER'S PLAN
Compare the fees, expenses, and services associated with each option including staying in plan, rolling over to an IRA, or rolling over to your new employer's plan.
CASH OUT
May be subject to taxes and penalties.
Asset Protection
STAY IN PLAN
Plan assets are generally protected from judgment creditors.
ROLL OVER TO IRA
State laws, which vary, may provide protection (sometimes up to a limit) for IRA assets.
ROLL OVER TO NEW EMPLOYER'S PLAN
Plan assets are generally protected from judgment creditors.
CASH OUT
N/A
