4 options for your old employer retirement plan

E*TRADE Securities


Options for an Employer Sponsored Plan such as a 401(k)

If you’ve changed jobs or retired, you may still have retirement assets with your former employer. You have four options for taking control of your money: roll over into an Individual Retirement Account (IRA), leave your money where it is, move your assets to a new employer's plan, or cash out.

Option 1: Rolling over into an IRA

Option 2: Leaving your money where it is

Option 3: Move your assets into your new employer’s plan

Option 4: Cash out


  • The advantage of this option is the immediate access to cash to use for large expenses, such as a big credit card debt or other priorities.


  • Cashing out prior to age 59 ½ from your retirement plan counts as an early distribution. This means that there may be taxes and a 10% early withdrawal penalty.
  • You’ll be subject to a mandatory 20% withholding fee for federal income taxes and possibly more for state income taxes depending on where you reside.
  • Investors who are considering taking a cash distribution of company stock should be aware of IRS rules that might allow them to defer paying taxes on the appreciation. This is typically referred to as "net unrealized appreciation." Learn more about this strategy.


Ready to take control of your old employer retirement plan with a Rollover IRA account?


Open an account

Want to learn more?

Our interactive rollover tool may help you evaluate your options so you can make an informed decision. You can also call 800-387-2331 to speak with an representative who will help you understand your choices and guide you through the process.

What to read next...

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