If you just got laid off or quit your job, one of the first things you need to do is figure out what to do with your 401K.

So here are the 3 main options available to you.

Option 1: leave it where it is.

If you have over $5,000 in your 401K, you likely can just leave it where it is.

But this is kind of like leaving your wallet at your exes house, it may not be the best of ideas.

For example you immediately lose some key benefits.

You can’t contribute to that account any more and you’re not able to take out any loans from that money if you have an emergency.

Option 2: You can roll that money over to an IRA.

This is generally a better option because it gives you way more control over your funds.

In an IRA you can invest the funds into whatever you want to and often times it will have lower fees than a 401K.

But on the other hand, if you make over $161K a year, this will make it harder to do a Backdoor Roth IRA

Which is why Option 3 may be better for you in that case: rolling it into your new employers 401K plan.

This is very easy to do and a benefit is it keeps your portfolio all in one place.

The main downside is you’ll have less investment freedom than an IRA and possibly higher fees.

Hope this helps!

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