Stay in your old plan | Cash out |
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BenefitsYour money can continue to grow tax-deferred. You can keep your assets in the same investments. |
BenefitsYou have cash in hand to take care of current needs. |
Keep in mindYour investment options are limited to what is offered in the plan. You’re still subject to the rules and restrictions of the plan. If your account balance is $1,000 or less, your plan might cash you out. If your balance is between $1,000 and $5,000, your plan might roll your balance into an IRA selected by your former employer. |
Keep in mindMoney you spend now won’t be there for you later. Your employer must withhold 20% of the taxable portion of your distribution for federal income taxes. You may owe more at tax time. A 10% early withdrawal penalty may apply if you’re under age 59-1/2. If you’re 55 or older when you leave your job, withdrawals are penalty-free but still taxable. Other exceptions may apply. Withdrawals from Roth accounts are tax- and penalty-free if the account was established at least five years before, and if you are at least 59-1/2 years of age, are disabled or have died. You may owe state and local taxes on the taxable portion of your distribution. |