Navigating Your 401(k) Account When the Balance is Under $7,000 After Leaving Your Job

What to Do with Your 401(k) Balance After Leaving Your Job

The 401(k) balance is subject to specific rules depending on its amount upon job separation.

For Balances Over $7,000:

• You can leave the money in the plan or move it to a new account.
• No additional contributions are allowed.

For Balances Between $1,000 and $7,000:

1. Employers may transfer the funds to an IRA without consent.
2. Review the new IRA's fees and investments.

For Balances Under $1,000:

• Employers may cash out the plan and withhold 20% for taxes.
• Deposit the full amount into a new account to avoid penalties.

Prevent closure by opting for a direct rollover, ensuring your funds remain intact.