Consolidating 401k plans
In the meantime, you need to come up with that 20 percent from your own savings in order to deposit the full account balance in your new 401(k). Rollover bad." If your new job doesn't offer a 401(k), or you don't have a new job yet, your other option is to roll over your old 401(k) funds into an IRA. The money is sent directly to the IRA fund, and you aren't on the hook for any taxes.
There is no such requirement for a 401(k) plan with your current employer, meaning you can let your savings continue to grow if you delay retirement [source: Vernon].You don't have to keep track of as much paperwork, and it's easier to balance the diversity of your portfolio if it's all right there on the same investment summary.You may also save money on fees if they are lower at your new 401(k) versus your older one.Note that the exception only applies to your current employer's plan, not an old 401(k) — another good reason to consolidate.Young people should not be trusted with their retirement planning.