What Can I Transfer my 401k to Without Losing Money?

Thursday, June 20th 2024

If you’re considering a job change, retiring, or simply want greater control over your retirement assets, you may be asking how to transfer your 401k without losing money. Your future depends on your 401k. To save more, make informed choices. We’ll discuss your 401k transfer alternatives, tax implications, and pros and downsides in this detailed article.

Rollover to a Traditional IRA

Rolling over an IRA is another common way to move a retirement account. This has many advantages:

Follow these procedures to move your 401k to a regular IRA without losing money:

Rollover to a Roth IRA (1)

Another option to transfer your 401k is to roll it over into a Roth IRA. While Roth IRAs provide tax benefits and a different structure from traditional IRAs. Contributions to a Roth IRA are made with after-tax dollars, and qualified distributions during retirement can be tax free. This can be a good option if you expect to be in higher tax brackets during retirement.

Follow these procedures to move your 401k to a Roth IRA without losing money:

Rolling your 401k to a Roth IRA may not be right for everyone. If you anticipate retiring in the lower tax band, a regular IRA rollover may be better.

Rollover to a New Employer’s 401k Plan

If you’re moving jobs and the new company offers plans for 401k, you can opt to transfer your old retirement account to that plan. This keeps retirement funds tax-deferred. This may also cut expenses or increase investing alternatives.

To transfer your 401k to a different plan of your new employer without losing money, take these steps:

Transferring your 401k to an employer’s plan could be a good option if the new plan offers higher investment options or has lower costs. However, if the new plan has limited choices for investment or charges more you might want to explore other options.

Leave Your 401k with Your previous Employer

You may choose to leave your 401k with your former employer. It’s conceivable if you’ve invested above $5,000. You can’t contribute anymore, but your assets grow tax-deferred.

If you want to leave your 401k with your former employer without losing the money, take these steps:

Leaving your 401k with your previous employer can be an easy and painless option. However, it might not be the ideal choice if the plan is a high cost with significant fees or only a few choices for investing. Furthermore, the idea of consolidating your retirement accounts will simplify managing your investments and track the progress you make towards reaching your goals in financial terms.

Partial Rollovers

Another option to consider when transferring your 401k is a partial rollover. This strategy allows you to transfer a part of the 401k balance into an alternative account while keeping the balance in the plan you have in place. Partially rolling over offers flexibility when managing your savings for retirement and allows you to diversify your investment across various types of accounts.

 Here’s how to exit your 401k without losing money:

Partial rollovers offer flexibility and diversification . However, they could also cause problems with your financial management. Be sure to weigh the benefits and drawbacks before making a decision on this option.

Important Considerations

When you transfer your 401k account without losing money, keep the following things in your mind:


Taking these factors into account and carefully examining your alternatives will help you move your 401k without endangering money. Taking the time to research and prepare may help you optimize your retirement savings and financial security, whether you pick a standard IRA, Roth IRA, new employer’s 401k, or another alternative.

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  • Cameron says:

    People need to be reminded about this: No RMDs for Roth IRAs. This is no small feat!

    • Hi Cameron,

      Indeed, this is a massive advantage however, this doesn’t mean Roth IRAs are the right IRA type for everyone! Consult a professional to make sure you open the right type of IRA for your own circumstances.

      Happy investing!