Job Change

The most solicited moment of your financial life

Change jobs and within weeks the calls begin: helpful strangers eager to assist with your "old 401k." The solicitation isn't coincidence — a rollover is the single largest movable sum most people ever control at one moment, and an industry exists to catch it (Account Churning, Commissions, and Advisor Conflicts of Interest's incentives, at their most concentrated). This chapter is the decision, stripped of the sales pressure.

The four options, honestly compared

An old workplace plan has exactly four exits. Leave it — legitimate if the plan's funds are cheap and good (some large plans beat anything retail); the risk is the forgetting documented in Mapping Every Account (over 30 million forgotten accounts, ~$2 trillion).¹ Roll to the new employer's plan — consolidation without tax events, sensible if the new menu is decent; keeps everything inside workplace-plan protections. Roll to an IRA — maximum menu freedom and consolidation, and the destination every solicitor is selling, because IRA assets pay the industry fees that workplace plans often don't: compare the actual expense ratios and any advisory fees against the old plan before believing "more choice" is free (AUM Fees, Hidden and Layered Fees). Cash out — almost always the wrong answer: taxes plus penalty plus the compounding amputated (Compounding Needs Time, Not Genius) — the option the industry doesn't push only because it can't charge on money you've burned.

The mechanics that matter: direct trustee-to-trustee transfer, never a check to you (the 60-day/withholding trap); and the one genuine tax nuance worth a professional — employer stock in the plan has special treatment worth evaluating before any rollover.