What should I do with my retirement account? 4 options to consider

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What should you do with your employer-sponsored retirement plan when you leave or change jobs? Here’s what to know before you decide.

“When changing jobs, what you do with your retirement plan savings is one of the biggest decisions that people have to make,” says Laura Kirkover, head of retirement and investment product consulting at Wells Fargo Advisors. “The first step is to uncover what all your options are.”

Kirkover and Cathleen Davis-Whitmore, an IRA product manager at Wells Fargo Advisors, discuss the main options to consider when determining how to handle your 401(k), 403(b), governmental 457(b), or other qualified employer-sponsored retirement plan (QRP):

1. Roll over QRP into an IRA

Rolling your retirement account into an IRA will allow your assets to maintain their tax-advantaged status and potential to grow. Choosing to go with an IRA could also provide access to investment options that weren’t available with your QRP.

An IRA may also allow you to work with a financial advisor, who can provide more personalized investment guidance than what’s available through a workplace plan. Kirkover and Davis-Whitmore recommend discussing this move with your advisor so you can address specific factors (like how close you are to retirement, your need to access money before age 59½, what happens if you continue working after age 72) that could impact your decision.

2. Leave QRP with your former employer

This option means you won’t need to take any immediate action. With most plans, you’re able to keep your investments and continue to have access to them. “But you’ll want to make sure to contact the plan administrator to confirm the details, especially if you have a loan,” Davis-Whitmore says.

With this option, emotions can be as big a factor as the financial implications due to the relationship you had with your former employer. “Did you leave on bad terms?” Kirkover asks. “This is one of the nonmonetary factors that can play a part in your decision-making.”

3. Move QRP into your new employer’s plan

This could be worth considering if you want to keep your retirement savings in one account and you’re satisfied with the new plan’s investment choices, features, and fee structure.

“With this option, your retirement assets are all consolidated in one account,” Davis-Whitmore says. “You’re moving it with you and keeping track of it. And you may have no required minimum distribution (RMD) from that QRP while employed.”

“You really need to do your homework regarding the limitations of your new employer’s plan,” Kirkover says. She also recommends checking for restrictions regarding your old QRP. “For example, does your old plan require you to liquidate?”

4. Withdraw money and pay associated taxes

Kirkover and Davis-Whitmore stress that this scenario depends on factors such as your age and tax situation. Talking to a financial advisor and tax planner can help you determine if this option may result in penalties or tax consequences.

What to consider next

It’s important to review the potential benefits and drawbacks for each scenario. Specifically, factors that should be considered and compared between the QRP and the IRA include fees and expenses, services offered, investment options, when penalty-free distributions are available, treatment of employer stock, when RMDs begin, and protection of assets from creditors and bankruptcy. Investing and maintaining assets in an IRA will generally involve higher costs than those associated with QRPs.

Additionally, Kirkover says you should think about your financial goals — short-term and long-term — before making a decision. “Each will have an impact on your decisions, so get the help of a financial advisor and a tax professional to help you make the right choices.”


1 Traditional IRA distributions are taxed as ordinary income. Qualified Roth IRA distributions are not subject to state and local taxation in most states. Qualified Roth IRA distributions are also federally tax-free provided a Roth account has been open for more than five years and the owner has reached age 59½ or meets other requirements. Both may be subject to the 10% additional tax if distributions are taken prior to age 59½.

Wells Fargo Advisors is not a tax or legal advisor.

Please keep in mind that rolling over your qualified employer sponsored retirement plan (QRP) assets to an IRA is just one option. Each option has advantages and disadvantages and the one that is best depends on your individual circumstances. You should consider features such as investment options, fees and expenses and services offered. Investing and maintaining assets in an IRA will generally involve higher costs than those associated with a QRP. We recommend you consult with your plan administrator before making any decisions regarding your retirement assets.