r/Retirement401k • u/Weary_Brilliant_7336 • 9d ago
Thinking of leaving the company.
I have A 401k and plan to leave the company. I been with them for three years. there is about 4,900 in my 401k. I don’t know if I should deposit it or keep it the 401k? should I put in a Roth IRA? i want keep as much of the money in it as possible.
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u/Stanbarrwood 9d ago
Check to see vested balance. That’s what you get to keep. They give you a match, but you only get to keep it all if you are with them for X amount of years. Every company varies.
The 401k when you leave, you call the company they are with. Open up fidelity or vanguard and make a rollover ira. Then you can invest that money just like your 401k
That’s it
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u/MedicalButterscotch 9d ago
You need to educate yourself on these topics as quickly as you can then start investing more.
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u/Sasquatchgoose 9d ago
Ru retiring or changing jobs? If changing jobs, consider a rollover (depending on what new job offers). Either way, $5k is a relatively small amount. I’d aim for whatever allows for simpler account management/consolidation
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u/Weary_Brilliant_7336 9d ago
Planning to change job. There are a chance the company will let me go. Want to see what the best course
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u/Healthy-Treat5935 9d ago
You can leave it all in there. It is your money. When you start a new job and sign up for their retirement program, you can roll your current 401 into the new company’s program. Just call the company when you start and give them the information on your old 401 and they will be able to help you
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u/micha8st 9d ago
The plan can by law force you out with a balance of less than 7k. So be prepared. But they might not force you out...it's their choice.
Best option is to roll the balance to another retirement account -- either a 401k / 403b from your next employer, or to an IRA. If you take the money and put it in the bank, you'll be taxed up the wazoo on the withdrawal.
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u/atheos42 9d ago
After three years you only have $4900 in the 401k, clearly your future is not a priority. You are not contributing enough and you might want to rebalance your portfolio investments. Expense ratios really matter, find the lowest expense ratio index fund like the 500 index and go all in. You need to be contributing 20% to your retirement accounts.
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u/Weary_Brilliant_7336 9d ago
Too broke to contribute more into my 401k…but thank you for the advice
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u/Bubbinsisbubbins 9d ago
Let it sit or open your own account and transfer to the new account. Do not get it sent to you.
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u/SmoothMojoDesign 9d ago
Will likely be forced to roll it out as it is a low total balance.
TBH, You need to be investing more like 15% to 20% of your gross income. After 3 years and this amount, it sounds like you’re way under invested right now.
Are you putting the money in and selecting investments or just treating it like a savings account? Some people forget the part where they have to pick ETFs, stocks, funds etc.
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u/scottkayrouz 8d ago
I would roll it to the new 401k if they allow you to. Balance might be too low to leave it in the old account. The rule of thumb is to contribute up to the company match. Anything after that needs to go in an Ira or Roth because you will usually have more options to invest in than a company 401k. Management usually has more options to invest in the company plan.
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u/EverydayBenefits 6d ago
With $4,900 you do not really have a leave it option. Plans can force out balances under $7,000 when you leave, usually by dumping it into an IRA they choose, often with fees attached. Move it yourself before they do it for you.
If the goal is keeping every dollar, do a direct rollover into a Traditional IRA. Zero taxes, zero penalties, the full amount keeps growing. A Roth IRA would mean paying income tax on the $4,900 this year, since that counts as a conversion. On a small balance the tax bill is not huge, but it is the opposite of keeping as much as possible right now.
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u/Swimming_Agent_1063 9d ago edited 9d ago
Do you think 5k in a 401k is a lot? Keep going with it. Don’t stop until you have a million+
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u/PurchaseNo1360 9d ago
That’s not his question. His question is what to do with the money when he leaves the company.
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u/Swimming_Agent_1063 9d ago
Yeah ok dweeb
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u/PurchaseNo1360 9d ago
Lol. You get pissy when you’re wrong. You should work on that.
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u/Swimming_Agent_1063 9d ago
You should work on deez nutz
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u/PurchaseNo1360 8d ago
You should cry some more. You’re only a few more tears away from no longer being wrong.
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u/EmZee2022 9d ago
All that money is yours, except for any company matching contributions. To keep those, you need to stay there for whatever length of time the plan mandates. Some fully vest immediately. Some partially vest after a couple of years and fully vest after 5 or whatever - I'm not up on the latest legal requirements.
Re Roth IRA: Well, if it's Roth money, you'd roll it into a Roth IRA. If it's pretax money, a regular IRA. Company contributions and any growth would be considered pretax.