Have You Recently Started a New Job?

What did you do with your hard-earned retirement income? 

Who is managing your assets if you’ve forgotten about them?


When a retirement account is abandoned, there is only a dormant, or past, investment strategy. Most 401k retirement plans are participant driven- meaning the account owner must make any changes to the investment options themselves- and when you’re no longer with that job, often times, it is forgotten about and timely changes are no longer being made.

When it comes time for withdrawing those funds or making changes to the accounts, it can be difficult and time consuming to track down past accounts and obtain the proper signatures. If the company has restructured, changed ownership, or the plan terminated altogether, it is easy for accounts to get lost.

Your team at investingsimply is dedicated to helping educate you to make the best decision for you and your abandoned retirement account(s).

Lower Fees On Your 401k through account consolidation

If you’ve changed jobs or are retiring, rolling over your retirement assets to an Indvidual Retirement Account, or IRA, can be an excellent solution. It is a non-taxable event when done properly, and gives you access to a wide range of investments and the convenience of having consolidated your savings into a single location. In addition, flexible beneficiary designations may allowed for the continued tax-deferred investing of inherited IRA assets.

Rolling your 401k into an IRA is not your only option when it comes to your retirement assets. Here’s is a brief look at those other options:

    • Leave the money in your former employers plan, if permitted
    • Cash out the accounts
    • Rollover the assets to your new employer’s plan, if one is available and it is permitted

We’re Here To Help

investingsimply is here to provide you with a place to consolidate these dormant accounts and help you manage your investments in a cost-efficient manner. Your investingsimply advisor will guide you through your available retirement plan options. Our risk questionnaire will identify your appropriate risk profile so that your account will be managed according to your financial goals. During your annual review, we will verify that all information remains accurate to your portfolio and that your beneficiaries are up to date.

Frequently Asked Questions

Should I rollover my 401k from my last employer?

There are different options available regarding your 401k at a former employer. If you have multiple 401k’s out there, it is easy to lose track of your accounts. Similarly, if your former employer makes any changes to the structure of the 401k plan, it may become difficult for you to access the funds in your dormant account. Unless you are still contributing, moving the account to your current employer retirement plan or to an IRA held with your financial advisor will better allow you to keep track of your money.

Why do I need to periodically review my 401k beneficiaries?

When your 401k account was first opened, you were asked to name someone(s) who would receive the account balance if you should pass away. Many people are familiar with this practice of naming a beneficiary, but as life changing events occur, it is important to make sure your beneficiaries are updated as well. Marriage, divorce, having children, or the death of a spouse could all impact your end of life directives. It is a good idea to review named beneficiaries every now and then to ensure that your assets are organized the way you want them to be in the event of your death.

What happens to my 401k after I leave my job?

When you leave your job, there are a few options available to you:

1. Leave the Account Where It Is – It is possible for you to take no action with your 401k when you leave your job. Some plans do not require you to do anything with your 401k, provided that the balance is greater than $5,000. By leaving your account in place, you are risking that you either forget about the account altogether or your family does not know about the account if you were to die. Making changes to that account could also require you to go through the HR department of your former employer. It is also important to note that oftentimes 401k plans offer limited investment selections for participants. 

2. Withdraw the Money – Taking this action could lead to increased taxable income for the year plus having to pay a 10% penalty if you are under 59.5 years old. In addition to the tax consequences, you will reduce your retirement savings by withdrawing the money now.

3. Roll the Account into Your Current Employer Plan – If you are currently contributing to an employer sponsored 401k, you may have the option to roll your former account into the current account. This option allows you to keep all of your money in one place and remain in the tax-deferred status. Your money would be invested according to the plan administrator of your current employer’s plan.

4. Roll It into an IRA – Moving your money into an IRA at a brokerage firm will give you the most flexibility with your investment choices while leaving the funds in a tax-deferred status. In this scenario, you have the ability to combine all of your inactive retirement accounts into one location to make things simple. Your financial advisor can guide you through the rollover process, make sure that you have the proper type of account (Roth or Traditional IRA), and recommend an appropriate investment strategy to meet your needs.

I just retired, what should I do with my 401k?

Depending on your age, you can begin withdrawing from your account without paying a penalty. If you do not need income from this account, and you wish to continue contributions, you will need to roll the account into an IRA at a brokerage firm. When you reach age 72, you will be required to take a minimum distribution annually whether your funds are in a 401k or an IRA. Contact your financial advisor for specific recommendations given your specific circumstances.

What are the advantages of combining my old 401k’s?

Having multiple accounts at various locations can get confusing. Consolidating the accounts to one location can give you a better idea of how much money you have saved for retirement, and it gives you one centralized place to go when you are ready to begin making withdrawals. Another benefit of combining your dormant accounts into an IRA is the greater amount of flexibility in choosing your investments. Plan Sponsored 401k’s have limited fund options depending on the custodian. In an IRA, you can choose from a wider selection of investments. Your financial advisor can help you identify the strategy that will help you reach your goal and then select the investments to meet that strategy. Also, it is important to consider the cost of your 401k accounts in comparison to an IRA. You will generally pay fees for both types of accounts. Combining your orphaned retirement accounts into one IRA can help you consolidate those fees into one place and could save you money.