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A bump-up certificate of deposit (CD), also known as a step-up CD or raise-your-rate CD, is a type of savings account that allows the account owner to “bump up” or increase the interest rate they earn if rates rise during the CD term. Typically, one bump up is allowed, and the other terms of the CD remain the same after that.

The initial interest rate of a bump-up CD is lower than that of other types of CDs, but it comes with the potential to earn a higher rate.

What Is a Bump-Up CD?

A bump-up CD is a type of savings account that’s similar to an ordinary CD in many ways.

If an investor opens a bump-up CD account, it’ll start with a certain interest rate. The investor will be required to deposit a certain amount of money to open the account and keep it there for a specified period. The major difference between a bump-up CD and a traditional CD is that the account owner can potentially increase the interest rate they earn if rates go up during the term of the CD. This bump up is typically allowed only once during the CD term.

How a Bump-Up CD Works

If, during the term of a CD, the issuer’s interest rates increase, the CD account owner can ask the issuing bank to raise the interest rate they earn on their CD. This is quite different from a standard savings account, where the account owner has no control over the interest rate. So if the initial rate on a bump-up CD is 4.00%, and during the maturity term the rate increases to 5.00%, the account holder can request a bump up to 5.00%.

If the interest rate drops to 4.50% sometime after that, the investor is protected and keeps their bump up to 5.00%.

Usually, interest rates can only be increased once during a CD term, but some banks do offer multiple bump ups if the term of the CD is long. Also important to note is that some banks may put a cap on how high the interest rate can be bumped on a CD. So if interest rates go up a lot, CD owners may not be able to fully take advantage. Generally, bump-up CDs have a 2-3-year term. Like a regular CD, these accounts are FDIC-insured.

Recommended: How to Invest in CDs

Example of a Bump-Up CD

Say an investor opens a bump-up CD with a two-year term and a rate of 4.00%. One year into the CD term, the issuing bank’s interest rates rise, and they now offer 5.00% on the same type of CD. The investor can request that the rate on their CD be increased to the new rate of 5.00% for the second year of its term.

In this example, if the investor deposited $10,000 into the CD when they opened it and earned 4.00% on their money for the full two-year term, by the end of the term, they would have $10,816.00. However, if they earned 4.00% for the first year and 5.00% for the second year, at the maturity date, they would have $10,920.00, or about $104 more. That might not seem like a lot, but when you’re saving and investing for the future, every little bit helps.

Advantages of Bump-Up CDs

There are some benefits to bump-up CDs, including:

•   The ability to raise the CD’s interest rate during its maturity term instead of having to wait or open a new CD

•   The potential to get new, higher rates without any early withdrawal penalties

Recommended: What Is Accrued Interest?

Disadvantages of Bump-Up CDs

Bump-up CDs come with some drawbacks as well. Here are some to consider.

•   Since bump-up CDs typically allow only one bump-up, they’re recommended for investors who have a deep understanding of the interest-rate system and what might happen during their investment term.

•   The initial interest rate on bump-up CDs tends to be lower than that of other types of CDs. So even though there is the ability to raise the rate later, a traditional certificate of deposit may still earn more interest since it likely starts at a higher rate.

•   Interest rates may not go up during the CD term, locking the investor into the initial lower rate.

•   If interest rates do start to increase, timing the bump up on a CD can be challenging. By bumping up earlier, you can take advantage of a higher interest rate for more time, but you could miss out on an even higher rate that might come later.

How to Open a Bump-Up CD

Banks and credit unions offer bump-up CDs just like they offer checking and savings accounts. To open a bump-up CD, an investor deposits a certain amount, and the CD has a particular starting interest rate and term. Once the bump-up CD is open, the account owner can contact the issuing bank or credit union to increase the rate if it rises during the CD term. As mentioned, bump-up CDs typically offer the account holder just one opportunity to request a rate increase.

Factors to consider when opening a CD include:

•   Maturity term of the CD: Bump-up CDs tend to have longer terms than traditional CDs, such as two years or more.

•   Bump-up frequency: Does the CD offer the opportunity to bump up more than once? Many don’t, but some may.

•   Initial interest rate: If interest rates don’t rise, the initial rate will be the ongoing rate throughout the CD term, and bump-up CDs tend to have lower interest rates to begin with.

•   Minimum deposit to open the account: Some bump-up CDs may require higher minimum deposits than traditional CDs, depending on the issuer.

•   Early withdrawal rules and penalties: Inquire with the financial institution what the consequences might be for cashing in the CD before the term ends.

•   Fees: Typically, there aren’t fees involved with CDs, but that isn’t always the case. Find out if there are any fees and how much they are.

Alternatives to Bump-Up CDs

There are several other types of interest-bearing deposit accounts and CD investment strategies that investors may want to consider, such as:

Traditional CD

A traditional CD has a fixed interest rate over the course of its maturity term. Traditional CDs often earn higher rates than bump-up CDs. They also usually have shorter terms.

CD Laddering

Since it can be hard to predict what will happen with interest rates in the future, another investment strategy is to create a CD ladder.

A CD ladder is a portfolio of CDs that each has a different interest rate and maturity term. This strategy provides an investor with a range of interest rates, allowing them to take advantage of changes in the market. Each time one of their CDs matures, they have some funds to put into a new CD or cash out. Usually, a longer-term CD will have a higher rate, but by opening some shorter-term CDs as well, investors can put their money into new ones if interest rates increase, rather than opening a bump-up CD.

Here is an example of how an individual might set up a CD ladder with five rungs if they have $10,000 to invest:

•   $2,000 in a one-year CD

•   $2,000 in a two-year CD

•   $2,000 in a three-year CD

•   $2,000 in a four-year CD

•   $2,000 in a five-year CD

As each CD matures, the individual can reinvest the funds into a new CD if interest rates are rising.

Step-Up CD

Similar to a bump-up CD, step-up CDs allow investors to take advantage of rising interest rates. The difference with a step-up CD is that the issuer automatically raises the interest rates at certain intervals throughout the CD term. With a bump-up CD, the rate isn’t automatically increased.

The Takeaway

If you’re looking for ways to bump up your savings, there are some other options in addition to CDs that you may want to consider. For instance, one way to potentially increase your savings is with a bank account with competitive rates, such as a high-yield savings account. You can shop around and explore the different savings options to see what might be right for you.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with eligible direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.

Better banking is here with SoFi, named the #1 Bank in the U.S. for the fourth year in a row by Forbes (2026).* Enjoy up to 3.10% APY on SoFi Checking and Savings.

FAQ

What is an 18-month bump-up CD?

An 18-month bump-up certificate of deposit (CD) is a CD savings account that earns a certain amount of interest over the course of 18 months. If interest rates rise during that time, the account owner can request that the interest rate their CD earns be increased to the new rate.

When should I bump up my CD?

If you have a bump-up certificate of deposit (CD), you may want to consider a bump up when interest rates rise. However, remember that you’re typically only allowed to bump up the rate once during the term of the CD. For this reason, bump-up CDs are generally highly suitable for investors who have a deep understanding of the interest-rate system and what might happen to rates during their CD term.

Who has bump-up CDs?

Bump-up certificates of deposit (CDs) are typically offered by banks, online banks, and credit unions. You can explore bump-up CD options at different financial institutions to find the right rates and terms for you.

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Rolling over a 401(k) means moving money from an old employer-sponsored retirement plan into another eligible retirement account, such as a new employer’s 401(k) or 403(b) plan or an individual retirement account (IRA). A rollover can help you keep retirement savings tax-advantaged, consolidate accounts, potentially access different investment options, keep contributions steady, and reduce investment costs.

The key is choosing the right account for your rollover, and using the correct rollover method to avoid unnecessary taxes or penalties.

If you recently changed jobs, have an old 401(k), or want to streamline your retirement accounts, here’s what to know about your rollover options, the steps involved, and the mistakes to avoid.

Your 401(k) Rollover Options at a Glance

When you leave an employer, you have several options for your old 401(k). The right choice depends on your existing plan rules, whether your new employer offers a retirement plan, your retirement goals, tax situation, and how much control you want over the account. It may help to use an IRA contribution calculator.

It’s important to weigh your options because not doing so can mean you lose out on significant retirement savings. As of July 2025, there were 31.9 million left-behind or forgotten 401(k) accounts holding approximately $2.1 trillion in assets, up almost 30% from mid-2023, according to data collected by Capitalize and the Center for Retirement Research.

Option	How It Works	Potential Pros	Potential Cons
Roll into a new employer plan	Move old 401(k) funds to your new employer’s plan, if allowed	Keeps workplace savings together; may preserve plan features; higher contribution limits than an IRA	New plan may have limited investment options or fees; not all plans accept rollovers
Roll into an IRA	Move old 401(k) funds to a traditional IRA or Roth IRA, depending on tax treatment	More investment choice; more control; account consolidation	IRA fees/rules may differ; creditor protection may vary; Roth conversions (if chosen) may be taxable
Leave it with former employer	Keep money in the old plan if allowed	No immediate action needed; may keep current investments/features	May be harder to track; may not allow new contributions; fees or access may change
Cash out	Take the money as a lump sum distribution	Immediate access to cash	Withdrawals are taxed as income, possible 10% penalty, loss of retirement growth potential

What Is a 401(k) Rollover?

A 401(k) rollover is the process of moving retirement money from an old employer-sponsored plan into another eligible retirement account. Common rollover accounts include a new employer’s 401(k) or 403(b) plan, if it accepts rollovers.

Or you can open an IRA (such as a traditional or Roth IRA), although annual contribution limits for IRAs are lower: $7,500 for tax year 2026 ($8,000 for those 50 and older).

One of the chief benefits of doing a rollover is consolidating your accounts to better manage your retirement plan overall. According to a report from Vanguard, an analysis of 22,000 retirement savers found that the median 50- to 59-year-old had three separate workplace retirement accounts, and 31% had four or more, making it complicated to keep track of investments, fees, and progress toward retirement goals.

What Are the Tax Implications of a Rollover?

Understanding the tax rules around rollovers is an essential part of your rollover decision. Remember that most 401(k) and other employer-sponsored plans take pre-tax contributions. That means contributions are deductible from your taxable income the year you make them. You will owe income tax when you withdraw the funds.

Some employer plans also offer Roth 401(k) options. Roth 401(k) accounts are funded with after-tax contributions. Contributions are not deductible, and you withdraw earnings tax-free after age 59 ½ , assuming you’d had the account for at least five years.

Rollovers vs. Cashing Out

A rollover is different from cashing out. With a rollover, the goal is generally to keep the money in a tax-advantaged retirement account such as another 401(k) or an IRA. With a cash-out, the money is distributed to you, which will likely trigger income taxes and possibly a 10% early withdrawal penalty if you’re under age 59 ½ — and can put your total retirement savings at risk.

Rollovers can involve pre-tax, Roth, or after-tax funds, and the tax treatment for any rollover will vary depending on the type of funds, as well as the rollover account you choose. If you’re unsure how your previous 401(k) plan is classified, contact your plan administrator before requesting a rollover.

How to Roll Over a 401(k) in 5 Steps

The exact rollover process can vary by plan provider, but most 401(k) rollovers follow the same basic path. Before starting, gather your old plan information, compare your rollover options, and confirm whether the receiving account can accept the rollover funds.

1. Review Your Old 401(k) Details

Start by reviewing your old 401(k) account. Look at the balance, investment options, fees, account type, and whether the money is pre-tax, Roth, after-tax, or a mix.

It’s wise to check whether you have an outstanding 401(k) loan, employer stock, or plan-specific features that could affect your decision.

2. Choose Where the Money Will Go

Next, decide whether you want to roll the money into a new employer’s plan, roll it into an IRA (sometimes called a rollover IRA), leave it with your former employer if allowed, or cash it out.

If you’re considering a new employer plan, ask whether it accepts incoming rollovers. If you’re considering an IRA, decide whether a traditional IRA, Roth IRA, or another IRA type is appropriate based on the tax treatment of your old 401(k) funds. Note that IRA rollovers and transfers are two different things.

3. Open the Receiving Account, If Needed

If you’re rolling money into an IRA or a new account, you may need to open that account before requesting the rollover. If you’re rolling money into a new employer plan, the plan administrator can explain what information is needed.

Because tax treatment matters and can impact the amount of income tax you’ll owe, make sure the receiving account matches the type of money being moved. For example, pre-tax 401(k) money is often rolled into a traditional IRA or pre-tax 401(k), while Roth 401(k) money is typically rolled into a Roth IRA or Roth 401(k), if available.

Doing an apples-to-apples rollover in a timely fashion can prevent unwanted tax bills and/or penalties.

4. Request a Direct Rollover

In many cases, a direct rollover is the simplest approach. With a direct rollover, the money moves directly from the old plan to the receiving retirement account, or the check is made payable to the receiving institution for your benefit.

Contact your old 401(k) plan administrator to ask about its rollover process. You may need to complete forms online, by phone, or on paper.

5. Confirm the Funds Arrived and Choose Investments

After the rollover is processed, confirm that the funds arrived in the receiving account. Then review how the money is invested.

In many cases, rollover funds may arrive as cash and remain uninvested until you choose investments. This is often the case if the rollover account doesn’t offer the same investments you had with your previous employer. If the account is intended for long-term retirement savings, make sure the investment allocation fits your timeline, risk tolerance, and goals. You may want to consult with a professional for guidance.

Recommended: Stock Market Basics

401(k) Rollover Options

Here’s an overview of the main options for an old 401(k).

1. Roll Over Money to a New 401(k) Plan

If your new employer’s 401(k) plan accepts rollovers, you may be able to move your old 401(k) into the new plan.

This can make it easier to keep workplace retirement savings in one place. It may also preserve certain plan features, such as loan availability, creditor protections, or access rules that differ from IRAs.

However, not all plans accept rollovers. You’ll also want to compare investment choices, fees, and account features before deciding.

2. Roll Over Your 401(k) to an IRA

Another option is rolling your old 401(k) into an IRA. This may provide more investment options and more control over the account.

A traditional 401(k) is often rolled into a traditional IRA, which can preserve tax-deferred treatment. A Roth 401(k) is often rolled into a Roth IRA, which can preserve Roth tax treatment. Rolling pre-tax 401(k) money into a Roth IRA is generally treated as a Roth conversion and will likely create taxable income.

IRAs can offer flexibility, but they also have different rules than 401(k)s. For example, creditor protections only exist up to certain limits and can vary by state. IRA contribution limits are lower than 401(k) limits, and loans are not available from IRAs.

3. Leave Your 401(k) With Your Former Employer

In some cases, you may be able to leave your money in your former employer’s plan. This can be convenient if you like the plan’s investment options, fees, or features.

However, it’s important to remember that you usually cannot make new contributions to a former employer’s 401(k). It can also be harder to track multiple old accounts over time, especially if you change jobs more than once. In short, this option can be risky in terms of your long-term savings.

Leaving your funds may not be an option; some plans may require action if your balance is below a certain amount. Check the plan’s rules before assuming you can leave the account indefinitely.

4. Cash Out Your Old 401(k)

You may be able to cash out your old 401(k), but this option can be costly and can put your retirement security in jeopardy.

A cash-out is generally treated as a taxable distribution; meaning that you’ll owe income tax on the amount you cash out. If you’re under age 59½, you may also owe a 10% early withdrawal penalty on top of the income tax, unless an exception applies. Most important: Cashing out can also reduce the money available for future retirement growth. For these reasons, cashing out is often considered a last resort.

Recommended: ‘How Much Can I Contribute to an IRA?’

Direct vs. Indirect 401(k) Rollovers

How the rollover is processed matters. The two main types are direct rollovers and indirect rollovers.

Rollover Type	How It Works	Tax Considerations	Best For
Direct rollover	Money moves directly from the old plan to the receiving plan or IRA, or a check is made payable to the receiving institution for your benefit	Generally avoids mandatory 20% withholding and reduces risk of missing the 60-day deadline	Most rollovers
Indirect rollover	Distribution is paid to you, and you redeposit it into another eligible account	Generally subject to 20% withholding from employer plans; full amount must be rolled over within 60 days to avoid taxes/penalties	Rare situations where direct rollover is not available or practical

In most cases, a direct rollover is simpler and less risky. With an indirect rollover, you generally have 60 days to redeposit the funds into another eligible retirement account. If 20% is withheld, you may need to use other money to replace the withheld amount if you want to roll over the full balance.

If the full amount is not rolled over by the deadline, the amount not rolled over will likely be treated as a taxable distribution, and may be subject to an early withdrawal penalty. Some exceptions apply.

Where Should You Roll Over a 401(k)?

The right rollover destination depends partly on the tax treatment of the money in your old 401(k).

Old Account Money	Common Rollover Destination	Tax Consideration
Pre-tax 401(k) money	Traditional IRA or new pre-tax 401(k)	Usually preserves tax-deferred treatment
Roth 401(k) money	Roth IRA or Roth 401(k), if available	Usually preserves Roth treatment
Pre-tax 401(k) to Roth IRA	Roth IRA	Generally treated as a Roth conversion and will create taxable income
After-tax 401(k) money	Depends on plan rules and account type	Tax treatment can be complex; consider tax guidance

If your old 401(k) includes a mix of pre-tax, Roth, and after-tax money, ask the plan administrator how those assets will be handled before starting the rollover.

Before You Roll Over a 401(k): Questions to Ask

Before moving retirement funds, consider asking these questions:

•   Does your new employer plan accept incoming rollovers?

•   Are your old 401(k) funds pre-tax, Roth, after-tax, or a mix?

•   What fees apply in the old plan, new plan, or IRA?

•   How do the investment options compare?

•   Are you holding employer stock that may qualify for net unrealized appreciation treatment?

•   Do you have an outstanding 401(k) loan that must be repaid?

•   Do you need access to plan-specific features, loans, or protections?

•   Are you close to or already taking required minimum distributions?

•   Are there surrender charges or restrictions on certain investments?

•   Do you understand the tax treatment of the receiving account?

•   Do you want a self-directed account or investment help?

If you’re unsure how a rollover could affect your taxes, it may be wise to speak with a tax professional before making a move.

When Is a Good Time to Roll Over a 401(k)?

A common time to consider a 401(k) rollover is immediately after leaving a job. A rollover may also make sense if you want to consolidate retirement accounts, access different investment options, reduce fees, or simplify account management. You might consider rolling over a 401(k) if:

•   You changed jobs and want to consolidate retirement savings, to simplify recordkeeping and account management

•   Your old plan has high fees or limited investment options

•   Your new plan accepts rollovers and has strong features and more investment options

•   You want IRA investment flexibility

While you don’t want to delay, you also don’t want to rush into the wrong decision. Review your old plan’s fees, investments, protections, and special rules before deciding.

When You Might Not Want to Roll Over a 401(k)

A rollover is not always the best choice. You may want to pause before rolling over if:

•   Your old plan has very low fees or strong investment options

•   You need certain creditor protections that may differ in an IRA, per state and ERISA rules

•   You left your job during or after the year you turned 55 and may need access to funds under the rule of 55

•   You hold employer stock and may qualify for net unrealized appreciation treatment

•   You have an outstanding 401(k) loan that must be repaid

•   Your new employer plan or IRA has higher costs or fewer useful features

•   You are already taking required minimum distributions (RMDs)

These situations can be more complex, so consider getting professional guidance before acting.

What to Do After a 401(k) Rollover

Once the rollover is complete, there are a few follow-up steps to consider.

•   Confirm the funds arrived in the receiving account.

•   Verify that pre-tax and Roth assets went to the intended account type.

•   Choose new investments, such as mutual funds or ETFs, if the money arrived as cash.

•   Review your asset allocation and risk level.

•   Update the beneficiaries on the account.

•   Set up online access and alerts for online investing and troubleshooting.

•   Keep rollover documentation for tax records

•   Watch for tax forms, such as Form 1099-R and Form 5498

A rollover can help consolidate retirement savings, but the money still needs to be managed in a way that supports your long-term goals.

401(k) Rollover Mistakes to Avoid

Rollovers can be straightforward, but mistakes can create tax headaches. Here are some common ones to watch for.

Cashing Out Without Understanding the Cost

Cashing out can trigger income taxes and possibly a 10% early withdrawal penalty. It can also reduce your future retirement savings.

Choosing an Indirect Rollover When a Direct Rollover Is Available

Indirect rollovers come with more risk, including withholding and the 60-day redeposit deadline. A direct rollover is often simpler.

Missing the 60-Day Deadline

If you receive rollover funds directly and do not redeposit them into another eligible retirement account within the required timeline, the distribution will likely be treated as a withdrawal and therefore taxable.

Forgetting About 20% Withholding

For certain distributions paid directly to you from an employer plan, 20% may be withheld for federal taxes. To roll over the full amount, you may need to replace the withheld portion using other funds.

Rolling Pre-Tax Money Into a Roth Account Without Tax Planning

Moving pre-tax 401(k) money into a Roth IRA is generally a taxable Roth conversion. That may be useful in some situations, but it can also increase taxable income for the year.

Mixing Roth and Pre-Tax Funds Incorrectly

Roth and pre-tax funds have different tax treatment. Make sure each type of money goes to the correct receiving account.

Forgetting to Invest the Rollover

If rollover funds arrive as cash, they may not be invested automatically. Review your investment choices after the money arrives.

Ignoring Fees and Investment Options

Compare administrative fees, expense ratios, advisory fees, and available investments before deciding where to move the money.

Overlooking Employer Stock Rules

If your 401(k) holds employer stock, net unrealized appreciation rules may apply. These rules can be complex, so consider tax guidance before rolling over.

Forgetting to Update Beneficiaries

Beneficiary designations do not always carry over the way you expect. Review and update beneficiaries after opening or receiving a new account.

The Takeaway

When you leave a job, you generally have several options for an old 401(k): roll it into a new employer’s plan, roll it into an IRA, leave it with the former employer if allowed, or cash it out. Each option has tradeoffs. A new 401(k) may keep workplace savings together, an IRA may offer more investment choices, leaving the account alone may preserve certain plan features, and cashing out can trigger taxes, penalties, and loss of future retirement growth.

For many people, a direct rollover is the simplest and least risky method because the funds move directly to the receiving retirement account. Before making a decision, compare fees, investment options, account features, tax treatment, creditor protections, and whether you need professional tax or financial guidance.

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.

Easily manage your retirement savings with a SoFi IRA.

FAQ

What is a 401(k) rollover?

A 401(k) rollover is the process of moving money from an old employer-sponsored retirement plan into another eligible retirement account, such as an IRA or a new employer’s 401(k) or 403(b) plan.

Is it better to roll over a 401(k) to an IRA or a new 401(k)?

It depends on fees, investment options, account features, creditor protections, access rules, and whether your new plan accepts rollovers. An IRA may offer more investment choice, while a new 401(k) may keep workplace savings together and preserve certain plan features, like higher contribution limits vs an IRA.

How long does a 401(k) rollover take?

The timeline varies by plan provider and receiving institution. Some rollovers may take a few business days, while others may take several weeks, especially if paperwork or a mailed check is involved.

What is the 60-day rollover rule?

With an indirect rollover, you generally have 60 days from the date you receive a retirement plan distribution to deposit it into another eligible retirement account. Missing the deadline may cause taxes and penalties.

What is the difference between a direct and indirect rollover?

In a direct rollover, money moves directly to the receiving retirement account. In an indirect rollover, the money is paid to you and you are responsible for redepositing it to an eligible account with the required timeline (typically 60 days). An indirect rollover is generally subject to 20% tax withholding, meaning you may need to use other funds to replace that withheld amount if you want to roll over the full balance.

Can I roll a traditional 401(k) into a Roth IRA?

Yes, but rolling pre-tax 401(k) money into a Roth IRA is generally treated as a Roth conversion and may create taxable income.

Can I roll a Roth 401(k) into a Roth IRA?

Yes, Roth 401(k) money can generally be rolled into a Roth IRA, though five-year rule considerations may apply.

Can I roll over my 401(k) while still employed?

Sometimes. Some plans allow in-service rollovers, especially if you’re 59 ½ or older, but many do not. Check your plan rules.

What happens if I cash out my 401(k) instead of rolling it over?

The distribution may be subject to income taxes and, if you’re under age 59½, a 10% early withdrawal penalty may apply unless an exception applies. Cashing out also reduces the amount you have saved for retirement.

Do I have to pay taxes on a 401(k) rollover?

Typically, no. A direct rollover from a pre-tax 401(k) to a traditional IRA or new pre-tax 401(k) is generally not taxable at the time of rollover. A rollover to a Roth account that involves a conversion from pre-tax to after-tax funds may create taxable income.

Can I leave my 401(k) with my old employer?

In some cases, yes. Whether you can leave the money in your old plan depends on the plan’s rules and your account balance.

What should I do after rolling over my 401(k)?

Confirm that the funds arrived, choose investments if needed, update beneficiaries, keep tax records, and review whether the account fits your long-term retirement strategy.

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INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUE

SoFi Invest is a trade name used by SoFi Wealth LLC and SoFi Securities LLC offering investment products and services. Robo investing and advisory services are provided by SoFi Wealth LLC, an SEC-registered investment adviser. Brokerage and self-directed investing products offered through SoFi Securities LLC, Member FINRA/SIPC.

For disclosures on SoFi Invest platforms visit SoFi.com/legal. For a full listing of the fees associated with Sofi Invest please view our fee schedule.
Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.
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Exchange Traded Funds (ETFs): Before investing in Exchange Traded Funds (ETF), always read the fund's prospectus. It contains important information about the fund’s objectives, risks, and fees. You can get a prospectus from the fund company’s website or by emailing our customer service at [email protected].
Mutual Funds (MFs): Investors should read and carefully consider the information contained in the prospectus, which contains the Mutual Fund’s investment objectives, risks, charges, expenses, and other relevant information. You may obtain a prospectus from the Fund company’s website or SoFi's customer service at: 1.855.456.7634. Mutual Funds must be bought and sold at NAV (Net Asset Value); unless otherwise noted in the prospectus, trades are only done once per day after the markets close. Investment returns are subject to risks. Shares may be worth more or less their original value when redeemed. The diversification of a mutual fund will not protect against loss. A mutual fund may not achieve its stated investment objective. Rebalancing and other activities within the fund may have tax implications.
Calculator: This calculator is for educational purposes only and based on mathematical principles that do not reflect actual performance of any particular investment, portfolio, or index. Results are not gaurenteed and should not be considered investment, tax, or legal advice. Investing involves risks and results vary based on a number of factors including market conditions and individual circumstances. Past performance is not indicative of future results.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
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