Changing jobs is a wonderful opportunity to start fresh and go to the next step in your career. But when you turn the page and move on to new opportunities, you face some loose ends to tie up – especially with your retirement accounts.

Many job-switchers overlook 401(k) management. Specifically, what should you do with your old 401(k)?

According to the Bureau of Labor Statistics, the average American holds 12 jobs between 18 and 50.

That's potentially 12 old 401(k) accounts left behind! An estimated 24 million forgotten 401(k)s exist, with over $1.35 trillion in assets sitting untouched.

With so much money at stake, you need to keep your retirement savings from getting lost in the shuffle when you change jobs. So today, let’s explore what your options are for your 401k) when you change jobs.

Options for Your 401K

Here are the four main choices you have to manage your 401(k) when you get a new job:

Rollover to Your New Employer's Plan

This move neatly consolidates your savings into one place — giving you more control and simplicity. But before transferring your 401(k), compare fees, investment choices, and other key details in both plans. You want assurance your money will keep working as hard for you in the new account.

Convert to a Roth IRA

Converting your traditional 401(k) to a Roth IRA is like giving your retirement savings a healthy upgrade. Yes, you'll pay taxes upfront. But as an educated investor knows, future tax-free withdrawals make this move worthwhile. Converting makes particular sense if you expect to land in a higher tax bracket down the road.

Leave It with Your Former Employer

Sometimes, the best move is no move at all. Leaving it in place may be ideal if your old 401(k) has great investment options and low fees. Just remember you can no longer contribute, so you must track it separately from new accounts. There is no "out of sight, out of mind" here.

Cash Out

Seeing that lump-sum payout can be tempting. But cashing out your 401(k) early is like eating all your retirement savings at once. It may satisfy short-term cravings, but you'll regret it later. Cashing out before 59 ^1/2 leads to taxes, penalties, and lost growth. Only consider this nuclear option in true financial emergencies.

Why Staying Proactive Matters

Managing your 401(k) during job changes isn't just about being savvy. Here are three key reasons it matters:

• Consolidating accounts makes monitoring investments and tracking progress easier over time.
• Potentially lower fees. Every dollar saved on fees remains working for your future.
• More investment options. Your new plan or IRA may offer choices to tailor your savings strategy.

Take charge when you switch jobs and ensure you're making informed decisions. Your future self will thank you.

Save with Savvly

We know that managing your 401(k) may seem tedious and downright boring when changing jobs, but you must prioritize it.

Retirement accounts like 401(k) s comprise nearly 30% of household net worth in retirement, so while consolidating your savings and gaining more control isn't glamorous, it's crucial to building long-term wealth.

Savvly aims to shake up retirement planning by developing the world's first market-driven pension - designed to provide affordable lifetime income.

Consider it a financial safety net that grows with you.

By joining Savvly's waitlist, you'll be first in line when our exciting new product launches. It's engineered to deliver market returns plus a longevity bonus - a compelling option for your nest egg and future peace of mind.

Savvly is the world's first market-driven pension designed to provide easy, affordable lifetime income - at a fraction of the cost of an annuity. It offers income precisely when you need it most. You can have confidence knowing you've got extra income in retirement. The best part? It provides market returns plus a long-life bonus by partially giving up liquidity.

As you navigate career changes, services like Savvly offer a fresh take on retirement readiness. We hope you'll join us in bringing innovative solutions to take your financial life to the next level.

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