5 Frequently Asked Questions About 401(K) Plan Rollovers

What is a rollover and why should I consider it?

What are my options for a rollover?

Will I need to pay taxes on a rollover?

Are there other factors I should consider when pursuing a 401(K) Rollover?

• If you don’t take action by a specified deadline and your account balance is between $1,000 and $5,000, your former employer may automatically rollover your money into an IRA.
• If your account holds less than $1,000 and you don’t make a distribution choice, you could receive a check for the balance, with 20% withheld for taxes. Once you receive your money, however, you usually have 60 days to perform a rollover and avoid taxes and penalties.
• Nearly one-third of employers have a 6-12 month waiting period before you can start making contributions to your new 401(k). Your financial professional located at your credit union can help you explore alternatives that will keep your retirement savings growing during that waiting period.

So, you're leaving a job. What can you do with the money in your 401(K)?

Take the money now

Keep the money in your current plan if your employer allows it

Rollover your account to an IRA (Individual Retirement Account) or your new employer’s 401(k)