How to Transfer a 401(k) to a New Job

It’s easy to forget about an old 401(k) plan when changing to a new job because it’s such a busy time. But by not rolling over your 401(k), you might be losing some serious cash.

Read on to learn some key reasons to prioritize a 401(k) rollover — and how to transfer a 401(k) to a new job.

Why Should I Consider Moving My 401(k)?

Rolling over a 401(k) may have some significant benefits. For example, if your new employer’s plan offers a broader range of investment choices, moving a 401(k) might gain you access to investment vehicles that better align with your financial goals.

Not only that, if you leave your 401(k) where it is, you may forget about it. There are 31.9 million forgotten 401(k) accounts in the U.S., according to one 2025 estimate. By rolling over a 401(k) to a new plan, you’ll know where your money is.

Also, when you forget about a 401(k), your portfolio may no longer have your desired asset allocation as time goes on. It’s generally important to keep tabs on investments to ensure they are on track and appropriate for your time horizon and goals.

And finally, leaving your 401(k) may cost you in fees. Here’s why: Certain fees go into effect when you open a 401(k), which typically include administrative, investment, and custodial fees. Employers may cover some of these fees until you leave the company. Once you’re gone, that entire cost might shift to you.

If the fees are high, rolling over a 401(k) to a plan with your new employer that has lower fees, or to a traditional IRA, may be advantageous.

Recommended: IRA Deduction Rules

4 Options For Your 401(k) When You Change Jobs

When you get a new job and you have a 401(k) from your previous employer, you have several options to consider, including the following:

1. Leave It With Your Former Employer

You aren’t required to roll over your 401(k) to a new employer’s plan. If you have more than $7,000 in the old 401(k) account, you can leave the funds where they are. But keep in mind that you will no longer be able to make 401(k) contributions to the account.

What happens to your 401(k) when you leave your job and you have between $1,000 and $7,000 in your account is that your former employer may not allow you to keep it there. Instead, they might roll over the 401(k) into an IRA in your name. If you have less than $1,000 in your 401(k), the employer will often cash out the funds and send you a check for the amount.

2. Roll Over a 401(k) to Your New Employer’s Plan

If your new employer offers a 401(k) plan and you are eligible to participate, you can roll the money over from your old plan to the new plan as long as the plan allows it. Consolidating your 401(k)s could help you manage all of your retirement savings in one place.

The process to move a 401(k) to a new employer is usually relatively simple. You can request that the 401(k) administrator at your old company move the funds into your new employer’s plan through what’s known as a direct transfer (see more about this below).

3. Roll Over a 401(k) to an IRA

An IRA is another option for your 401(k) funds. A rollover IRA can give you more control over your investment options, and you can do it through a direct transfer of funds from your old employer to a new IRA account you set up.

If you choose to roll over the money into a Roth IRA or traditional IRA you can make annual contributions. In 2026, individuals under age 50 can contribute up to $7,500 in an IRA, and those 50 and older can contribute up to $8,600.

The type of IRA you open typically depends on whether you have a traditional 401(k) or a Roth 401(k). If you have a Roth 401(k) you’ll need to roll it over into a Roth IRA.

You can open an IRA online and roll over your 401(k) into it. Just keep in mind that IRAs don’t come with employer-provided benefits, such as matching contributions.

Recommended: IRA Transfer vs Rollover

4. Cash Out Early

You can also choose to cash out your 401(k). However, if you’re younger than 59 ½, you will typically have to pay taxes on the money, and perhaps an additional 10% early withdrawal penalty.

Under some qualifying circumstances, the 10% fee may be waived, such as when the funds will be used for eligible medical expenses. But if there are no qualifying circumstances in your situation, think carefully about cashing out your 401(k) to make sure it’s the right choice for you.

Pros and Cons of Transferring a 401(k) to a New Job

Rolling over your 401(k) to your new employer’s plan has potential benefits and drawbacks. Here are the possible advantages and disadvantages to consider.

Pros:

•   More convenience. Transferring your 401(k) to your new employer’s plan can consolidate your tax-deferred dollars into one account. Keeping track of and managing one 401(k) account may simplify your money management efforts.

•   Streamlining investment decisions. Not only does consolidating your old 401(k) with your new 401(k) make money management more straightforward, it can also streamline your investments. Having one account may make it easier to coordinate your investment strategies, target your asset allocations, monitor your progress, and make any adjustments as needed.

•   Maintaining the value of the account. With a direct rollover, there are no taxes or penalties to pay. The funds are typically moved tax-free.

Cons:

•   Loss of certain investment options: Your new employer’s plan may offer different investment options than your old plan, and you may lose some options you liked. The new plan might also offer fewer investment options, limiting your ability to diversify your portfolio.

•   Increased fees: The new employer’s plan may have higher fees associated with it, which could eat into your investments over time.

•   Possible plan restrictions: Some employer 401(k) plans don’t allow rollovers or they might have a waiting period.

How to Roll Over Your 401(k) to a New Employer

If you’ve decided to roll your funds into your new employer’s 401(k), these are the steps to take:

1.    Contact your new plan’s administrator to get what’s known as the account address for the new 401(k) plan, and then give that information to your old plan’s administrator.

2.    Complete any necessary paperwork required by your old and new employers for the rollover.

3.    Request that your former plan administrator send the funds directly to the new plan via a direct rollover.

You could also have them send a check to you, which you then give to the new plan’s administrator, but you will need to send the money to the new plan administrator within 60 days of receipt or you might face taxes and penalties.

4.    Confirm that the money arrived in the new 401 (k) and choose investments.

Recommended: Rollover IRA vs. Traditional IRA: What’s the Difference?

The Takeaway

There are benefits to rolling over a 401(k) after switching jobs, including streamlining your retirement accounts and making it easier to manage them. You may choose to roll over your 401(k) into a new employer’s plan, or into an IRA that you manage yourself, which might give you more investment options to choose from. Be sure to weigh the pros and cons of the different choices, and perhaps consult a financial professional, to help decide which option may be best to help you save for retirement.

Prepare for your retirement with an individual retirement account (IRA). It’s easy to get started when you open a traditional or Roth IRA with SoFi. Whether you prefer a hands-on self-directed IRA through SoFi Securities or an automated robo IRA with SoFi Wealth, you can build a portfolio to help support your long-term goals while gaining access to tax-advantaged savings strategies.

FAQ

How long do I have to move my 401(k) after leaving a job?

If the balance in your 401(k) is $7,000 or more, you can typically leave it there as long as you like. However, if you choose to roll over the 401(k) through an indirect rollover, you generally have 60 days from the date of distribution to deposit the funds into the new 401(k) or an IRA. Otherwise, it may be considered a taxable distribution and may be subject to penalties.

If your 401(k) balance is less than $7,000, your former employer may not allow you to leave it there and might roll it over into an IRA. If the balance is less than $1,000, they may cash it out and send you a check for the amount.

What happens to my 401(k) if I am fired?

If you’re fired, you will still have access to the money you’ve contributed to your 401(k) as well as the fully vested employer contributions. And as long as you have more than $7,000 in the account, you’ll generally have four options: You can keep the 401(k) where it is, roll it over to your new employer’s plan, roll it over to an IRA, or cash it out. If you have less than $1,000 in your 401(k), your employer may close the account and send you a check for the amount you had in it.

Do I have to pay taxes when moving a 401(k)?

You generally don’t have to pay taxes when moving a 401(k) as long as you do a direct rollover into another tax-deferred account like an employer’s 401(k) or a traditional IRA. However, if you do an indirect rollover in which the funds are sent to you, you typically have 60 days from the date you receive the funds to deposit them into the new account. Otherwise, the funds may be considered a distribution and they’ll be subject to taxes and penalties if you are under the age of 59 ½.

Can I merge multiple old 401(k)s into one account?

You can generally merge multiple old 401(k)s into a single account by rolling them over into an IRA. You may also be able to roll old 401(ks) into your current employer’s plan, as long as the plan allows it. Check with the plan administrator.

Are there penalties for cashing out a 401(k) early?

If you’re younger than age 59 ½, there are penalties for cashing out a 401(k) early. An early cash-out of a 401(k) will typically trigger federal, state and local income taxes. Plus, you may also be subject to a 10% early withdrawal penalty from the IRS (the penalty may be waived in some circumstances, such as certain financial hardships).

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