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Job Change? Run This Rollover Checklist First
The average worker changes jobs about a dozen times, and every change strands a 401(k) decision. This checklist keeps the money from becoming a footnote — or a tax bill.Before Your Last Day
- Check vesting. Employer match vests on a schedule; leaving at the wrong month can forfeit part of it. Ask HR for your vested balance in writing.
- Confirm the loan rule. An outstanding 401(k) loan often becomes due within weeks of separation; unpaid, it turns into a taxable distribution with possible penalty.
- Identify company stock. Appreciated employer shares may qualify for net unrealized appreciation treatment — a transfer to a taxable account can be taxed at capital-gains rates instead of ordinary rates. Ask before rolling everything blindly.
The Move Itself
- Choose the destination. New employer plan, an IRA, or leave it. Direct rollover wins in most cases; a small, cheap old plan can legally stay if the balance exceeds roughly $7,000.
- Insist on a direct rollover. Trustee-to-trustee transfer: no 20% withholding, no 60-day clock. An indirect rollover forces you to front the withheld 20% from savings and finish within 60 days.
- One rollover per 12 months. The once-per-year rule applies to IRA-to-IRA rollovers, and violations trigger disqualification; direct rollovers are exempt.
After the Money Lands
- Invest it. Rollover cash sits uninvested until you buy something — the most common post-move mistake.
- File the paperwork trail. Keep the 1099-R (if any) and confirmation statements; a direct rollover should generate no tax form beyond a code G notation.
One afternoon of paperwork protects a balance that may represent years of paychecks. Worth the afternoon.
This article is general educational information only, not financial, tax, investment, accounting, or legal advice, and is not a recommendation to buy, sell, or hold any product or security. Figures reflect published IRS, HMRC, and Social Security Administration guidance for 2026 and are subject to change and annual indexing; always confirm current thresholds with the official source before acting. Rules differ by country, state, and personal situation, and nothing here creates a fiduciary or advisory relationship. This site is supported by advertising, which does not influence our editorial conclusions. For any decision with real financial consequences, consult a licensed fiduciary advisor or tax professional.