As you begin a new adventure with a new job, don’t forget about your retirement plan.

Review your options

You have four choices when it comes to your retirement account:

1. Keep your retirement account with your former employer

2. Roll over your retirement account to your new employer’s option

3. Roll over your retirement account to an IRA that you choose

4. Cash out your retirement account and pay taxes (and possibly penalties) on it

Here are some things to consider as you weigh your options:

Account balance

Does your former employer have a minimum balance amount in order to keep the account open? Review the plan rules around account balance to understand what actions may be needed.

Many companies will continue to pay the expenses for participants as long as they're over the minimum balance requirements.

Other plans may close out your account if below a certain balance or automatically roll the account into a rollover IRA. Review your options and decide if you want to rollover the balance to new retirement account or an IRA of your choice to avoid any penalties.

Investment options

Review the plans and select the retirement account that offers diverse investment options and has low fees.

401(k) early withdrawal rules

Review the early withdrawal rules for your current plan. Some plans have specific exemptions to the early withdrawal penalties (for example if you are 55 or older in the year of separation) that only exist if you keep the money in the 401(k). If you roll over the account to another retirement account, the exemption may disappear.

Number of accounts

If previous job changes have left you with a handful of old retirement accounts, you may want to consider consolidating them. This will make it easier to review or change your investment options and also reduces the number of quarterly statements that you’ll have to review.

Roll over – don’t cash out

Be careful when moving your retirement funds to another account. If you are under age 59½ and choose the “cash out” option, then you’ll have to pay income tax in addition to a 10 percent early withdrawal penalty.

By choosing the rollover option, you’re able to move your retirement funds without the taxes and penalties.

If your employer sends you a check for the value of your account because the value is below the required minimum balance, you’ll have 60 days to deposit the money into your new retirement account to avoid paying income tax and penalties.  Additionally, the check will have a mandatory withholding rate withheld that you’ll have to apply for at tax time for refund.

Next steps

Whatever your financial needs or goals, we have the products and financial strength that can protect you and your family throughout your life. 

Talk to an Ohio National representative to see how our products can help you.