• Print
  • Default text size A
  • Larger text size A
  • Largest text size A

Compare Four Options for Your Old 401(k)

Got an old 401(k) from a former employer? We can help you make the right decision for your specific needs.

Three ways to help maximize your savings

When you retire or change jobs, you have three options for your old 401(k) that can provide continued potential tax-deferred growth opportunities.1 Or, you can cash out; but keep in mind that taxes will apply, plus possible withdrawal penalties.

  1. Roll over to a Fidelity IRA – Lets you consolidate your retirement accounts in one place, while continuing tax-deferred growth potential. With a Fidelity IRA, you have access to a wide range of investment options.

    Open a Fidelity Rollover IRA.

  2. Roll over to a new workplace plan (if permitted) – Lets you consolidate your 401(k)s into one account, while continuing tax-deferred growth potential. Investment options vary by plan.

  3. Stay in old workplace plan (if permitted) – Lets you continue tax-deferred growth potential; however, you can no longer contribute to the old plan. Investment options vary by plan.

Compare your options
Get a side-by-side comparison with more details highlighting the pros and cons of each potential tax-advantaged growth option to help you decide which is right for you.

View comparison.

Cashing out of a 401(k)

Depending on your plan and your situation, you may choose to take the money out of your 401(k) plan. If you cash out, you will gain immediate access to your money, which may suit your needs if you face an unexpected hardship.

However, your cash distribution will be subject to state and federal taxes and, before age 59½, a 10% withdrawal penalty may apply.5 By rolling over your old 401(k) to an IRA, the early withdrawal penalty will not apply.

Additionally, if you cash out of your 401(k), your money will no longer have the potential to continue to grow tax-deferred.

In other words, you would have almost none of the advantages of the other three options highlighted here.

Need help understanding your options?

Fidelity has dedicated rollover specialists available to help with anything from a quick question about your options to guiding you through each step of the rollover process.

Call 800-343-3548 to speak with a Fidelity rollover specialist now.

Learn more

What to do with an old 401(k)
Read this Fidelity Viewpoints® article on weighing the pros and cons of your options.

Rollover checklist
Follow these three easy steps to move your money from an old workplace savings plan to Fidelity.

Choosing investments for your IRA 
Get help selecting from Fidelity’s wide range of investments.

Keep in mind that investing involves risk. The value of your investment will fluctuate over time and you may gain or lose money.

Be sure to consider all your available options and the applicable fees and features of each before moving your retirement assets.
1. Traditional or Rollover IRA
2. The new employer may impose a waiting period.
3. You may take penalty free distributions from a qualified employer plan if you terminate employment with the employer sponsoring the plan during or after the year you reach age 55.
4. IRAs are protected under federal bankruptcy law; state law creditor protection of IRAs varies. Consult your legal adviser for more detailed information.
5. The taxable portion of your withdrawal that is eligible for rollover into an individual retirement account (IRA) or another employer's retirement plan is subject to 20% mandatory federal income tax withholding, unless it is directly rolled over to an IRA or another employer plan. (You may owe more or less when you file your income taxes.) If you are under age 59½, the taxable portion of your withdrawal may also be subject to a 10% early withdrawal penalty, unless you qualify for an exception to this rule. Be sure you understand the tax consequences and your plan’s rules for distributions before you initiate a distribution. You may want to consult your tax advisor about your situation.