How Does A 401(K) Rollover Work?

Your 401(k) may be subject to taxes or penalties when you get a new job – if you don’t make the right moves. Learn about consolidating and rolling your 401(k) balance into a new 401(k) plan or IRA.
Financial Expert
Managing Editor

If you are switching to a new employer that also has a 401(k) plan, you can have the money rolled over from one plan to another without any tax consequences.

Some 401(k) plans now have both traditional and Roth 401(k) features. For tax reasons, it is very important when rolling over to make sure traditional 401(k) balances go into a traditional 401(k) at your new employer, and that Roth 401(k) balances go into a Roth 401(k) plan.

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Richard Barrington has been a Senior Financial Analyst for MoneyRates. He has appeared on Fox Business News and NPR, and has been quoted by the Wall Street Journal, the New York Times, USA Today, CNBC and many other publications. Richard has over 30 years of experience in financial services. He has earned the Chartered Financial Analyst (CFA) designation from the Association of Investment Management and Research (now the “CFA Institute”).