Should I Rollover My 401(k) Or 403(b) After Changing Jobs?

Millennials are job switchers. Gallup polls have found that 21% of millennials report changing jobs within the past year. Outside of learning the new company org chart, job switching presents another challenge: what to do with your old 401(k) or 403(b).

Currently, many millennials do nothing. As a result, a 2017 study found that 59% of 25–34-year-olds had at least one old 401(k). For most individuals who are far away from retirement, this is almost certainly not the right option.

This article will lay out the disadvantages of doing nothing. It will also address some misconceptions about 401(k) rollovers, e.g., “you should not roll over a 401(k) if it’s performing well.”

Options for Your 401(k) or 403(b)

When you leave your job, you have four options for what to do with your 401(k) or 403(b):

1. Cash-out
2. Keep your money where it is
3. Roll your 401(k)/403(b) to your new employer
4. Roll your 401(k)/403(b) to an individual retirement account (IRA) through a financial services company like Vanguard, Schwab, or Blackrock.

Before going into these options, it’s important to note that a 401(k), 403(b) or an IRA is an account. Within…