Old 401(k)? You Have Four Options. Pick the Right One.
When you leave a job or retire, your 401(k) does not have to come with you, and sometimes it should not. We help retirees, pre-retirees, and career-changers in New Smyrna Beach and across Volusia County think through what to do with their old employer-sponsored retirement accounts so the decision serves the rest of the plan.
The Four Options
When you separate from an employer, your old 401(k) can go in one of four directions. Each has tradeoffs. There is no universal right answer.
Option 1: Leave it where it is. If you have over $5,000 in the plan, most employers will let you leave it. The investment options stay the same. You keep the institutional pricing of the plan. The downside: you now have a retirement account at a company you no longer work for, and you cannot contribute to it.
Option 2: Roll it to your new employer's plan. If your new employer offers a 401(k) and accepts incoming rollovers, you can consolidate. This works if the new plan has good investment options and reasonable fees. Many plans do not.
Option 3: Roll it to an IRA. Most common option for people retiring or near retirement. An IRA opens up far broader investment options, allows for Roth conversion planning, and consolidates accounts under one strategy. The plan's institutional pricing goes away, and so does the federal creditor protection that 401(k)s carry (though Florida law provides strong protections for IRAs).
Option 4: Cash it out. In most cases the least favorable option. You pay ordinary income tax on the full amount, plus a 10% early withdrawal penalty if you are under age 59½. Exceptions exist depending on your age and circumstances. Consult your tax professional before taking any distribution.
The right answer depends on your age, your tax situation, your plan's investment quality, and how this account fits the rest of your retirement.
How We Help
A 401(k) rollover decision is not just a paperwork question. Done right, it is a planning decision that sets up the next 20 to 30 years of withdrawals, taxes, and investment management.
Plan review. We look at the actual investment options in your current 401(k), the expense ratios, the share classes, and any employer-specific features (company stock, NUA opportunities, in-plan Roth options).
Tax-aware rollover. Direct trustee-to-trustee rollovers avoid the 20% mandatory withholding and the 60-day rollover trap. Indirect rollovers, where the check is sent to you, can become an expensive mistake. We handle the paperwork to keep the rollover clean.
Roth conversion planning. A rollover can be paired with a partial Roth conversion in the same tax year. For people retiring in their early 60s, a rollover year can present meaningful tax-planning considerations. Steven works in conjunction with your tax professional to help evaluate the options and potential implications before any decisions are made.
Pre-tax and after-tax separation. If your 401(k) has after-tax contributions, the rollover can be structured to send the after-tax portion directly to a Roth IRA, tax-free. This is a planning opportunity that is often overlooked and worth evaluating as part of any rollover review.
Net Unrealized Appreciation (NUA) review. If your 401(k) holds company stock that has appreciated significantly, there may be a one-time tax strategy worth more than a straight rollover. This decision is irreversible and worth modeling before you act.
Integration with your income plan. A rolled-over IRA does not exist in isolation. We coordinate it with your other accounts, your Social Security strategy, and your withdrawal sequence.
What You Get
When you bring your old 401(k) in for review, you walk away with:
- A written rollover analysis comparing all four options against your situation
- A tax projection showing the tax impact of each path
- A Roth conversion view, if a partial conversion makes sense in the rollover year
- An NUA review if your plan holds appreciated employer stock
- A rollover paperwork walk-through to make sure the transfer is done correctly
Who This Is For
This work tends to deliver the most value for households who are:
- Retiring in the next 1 to 2 years and have one or more old 401(k)s
- Already retired with old employer accounts they have not touched
- Career-changers with multiple 401(k)s across employers
- Surviving spouses who inherited an employer plan and need to decide what to do
- Holders of significantly appreciated employer stock inside a 401(k)
If that sounds like you, the next step is a 45-minute conversation. Bring your most recent 401(k) statement.
Why Steven
- RICP® (Retirement Income Certified Professional®)
- NSSA® (National Social Security Advisor)
- CLTC® (Certified in Long-Term Care)
- CF2® (Certified Financial Fiduciary)
- 15 years of practice, 350+ families guided
- We do not manage a proprietary fund family. Third-party investments are selected based on your risk profile and retirement objectives. Steven is not captive to any single carrier and does not operate under product-specific sales requirements.
- Rollovers are handled directly and tax-efficiently
- Local office on North Orange Street, downtown New Smyrna Beach
How to Get Started
Call or book.
Pick up the phone at (386) 402-4626, or schedule online.
Bring your statement.
Most recent 401(k) statement and the plan's summary plan description if you have it.
Discovery meeting (free).
We review your plan, your goals, and what each rollover option would look like for you. About 45 minutes.
Written analysis.
You leave with a clear recommendation and the paperwork to act on it if you choose.
No pressure to roll anything on day one.
FAQ
Do I have to roll my 401(k) over when I leave my job?
No. If your balance is over $5,000, most plans let you leave the account where it is. Whether you should depends on the plan and your situation.
What is the difference between a direct and indirect rollover?
A direct rollover sends the money straight from the old plan to the new account. No taxes withheld, no risk of missing a deadline. An indirect rollover sends the check to you, with 20% withheld for taxes, and gives you 60 days to deposit it into a new account. Miss the deadline and the whole amount becomes taxable. We generally recommend direct rollovers as the cleaner, lower-risk approach, though the right method depends on your specific plan and situation.
What is Net Unrealized Appreciation (NUA)?
If you hold significantly appreciated employer stock inside a 401(k), a special tax strategy may allow you to transfer the stock to a taxable brokerage account and pay long-term capital gains rates on the appreciation rather than ordinary income rates. The decision is irreversible. Steven works collaboratively with your tax professional to determine whether this strategy makes sense for your specific situation before any action is taken.
Should I roll my 401(k) into my new employer's plan or into an IRA?
The new employer's plan keeps institutional pricing and creditor protection. An IRA gives you broader investment options and Roth conversion flexibility. The right answer depends on the quality of the new plan and your retirement timeline.
Can I do a Roth conversion as part of a rollover?
Yes. A rollover year is often a good year for a partial Roth conversion, especially if your income is lower than usual due to a job transition. We model this before you commit.
Are you a fiduciary?
Investment advisory services are offered by Signal Advisors Wealth, LLC (“Signal Wealth”), a Registered Investment Adviser with the U.S. Securities & Exchange Commission. Registration with the SEC does not imply a certain level of skill or training.
Do you work with people who live outside New Smyrna Beach?
Yes. We regularly serve households in Edgewater, Port Orange, South Daytona, Daytona Beach, Ormond Beach, DeLand, Deltona, Orange City, Palm Coast, Sanford, Titusville, Holly Hill, Lake Helen, Glencoe, and the rest of Volusia County.
An old 401(k) is worth reviewing to make sure it still fits your current goals and timeline.
Schedule a free 45-minute review or call our New Smyrna Beach office.
Office: 112 N. Orange Street, New Smyrna Beach, FL 32168 Hours: Monday to Friday, 9:00 to 5:00
Compliance Disclaimer
Signal Advisors Wealth, LLC earns advisory fees based on assets under management. If you follow a recommendation to roll your 401(k) into an IRA managed by Signal Wealth, this creates a conflict of interest, as we benefit financially from that decision. We disclose this conflict and document why any recommended rollover is in your best interest prior to any action being taken.
Investment advisory services are offered by Signal Advisors Wealth, LLC ("Signal Wealth"), a Registered Investment Adviser with the U.S. Securities & Exchange Commission. Registration with the SEC does not imply a certain level of skill or training. Steven L. Rich is an Investment Adviser Representative of Signal Wealth. Insurance products and services are offered through New Smyrna Beach Retirement Solutions ("NSBRS"). Signal Wealth does not offer insurance products. NSBRS is not affiliated with Signal Wealth. Additionally, when NSBRS and/or its agents are recommending and/or selling insurance products they are not acting on behalf of Signal Wealth or in a fiduciary capacity, and instead are governed by the applicable insurance rules and regulations. For more information about Signal Wealth, or to receive a copy of our Form ADV or Form CRS, please click here. NSBRS is not affiliated with or endorsed by the U.S. Government or any governmental agency. NSBRS and its agents do not provide tax, legal, or Social Security advice. Clients are advised to consult their tax advisor or attorney regarding tax and legal matters and to contact the Social Security Administration at their local office or online at www.ssa.gov. Investing involves risk, including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss. Past performance is not indicative of future results. The information provided herein is for informational purposes only and should not be construed as a recommendation or as investment, tax, or legal advice. None of the information contained herein shall constitute an offer to sell or solicit any offer to buy any security, investment advisory, or insurance product. Investment advisory services are provided in accordance with a fiduciary duty of care and loyalty that includes putting client interests first and disclosing conflicts. Insurance services are subject to a best interest standard, which requires recommendations to be in the client's best interest. Advisors may receive commissions and other compensation for the sale of insurance and annuity products. Annuity guarantees are backed by the financial strength and claims-paying ability of the issuing insurance company. Any tax savings figures, projections, examples, or multi-year tax projections referenced are hypothetical and provided for illustrative purposes only. They are based on assumptions that may not reflect your individual circumstances, do not represent actual results, and are not a guarantee of future performance or outcomes. Individual results will vary. Strategies such as Roth conversions, capital gains harvesting, required minimum distribution planning, and charitable giving are not suitable for all individuals, involve trade-offs, and depend on your specific circumstances and current tax law, which is subject to change. There is no assurance that any strategy will reduce your overall tax liability. Neither Signal Wealth nor NSBRS provides tax or legal advice; consult your qualified tax professional or attorney regarding your situation.
This example is hypothetical and for illustrative purposes only. Actual tax impact will vary based on your income, filing status, state taxes, and individual circumstances. Consult your tax professional before making any distribution decision.
Tax-related strategies referenced above are general in nature. Individual results will vary based on your specific circumstances and current tax law, which is subject to change. Consult your qualified tax professional before acting on any tax strategy.