Tips to Help Protect Your Retirement When Changing Jobs

Changing Jobs? Do These 4 Things to Help Protect Your Retirement


Written by John Rothans

Nov 25, 2020

According to the U.S. Bureau of Labor Statistics, the average worker changes jobs every 4.2 years. When they do, they can miss out on certain retirement moves—which can put them at a disadvantage closer to their golden years.

If you’re thinking about making a career move or recently lost your job, learn what you can do to help safeguard your retirement.

What Happens to Your Retirement Funds When You Change Jobs?

The U.S. Securities and Exchange Commission lays out four options for your employer-sponsored “defined contribution” plan, such as a 401(k), when you change jobs or lose your job:

  1. Lump-sum distribution: A lump-sum distribution lets you cash out your account in full with a single payment. You will owe taxes and may have to pay tax penalties if you take money out before age 59½.
  2. Rollover to another retirement plan: Talk to both your previous and new employer. You may be able to ask your former employer to transfer your account balance directly to your new employer’s plan if it accepts such transfers.
  3. Rollover to an IRA: Options start with conversations and questions! You can ask your former employer to transfer your account balance to an IRA. This might include a self-directed IRA that gives you the flexibility to purchase alternative assets like gold and silver.
  4. No change: You may be able to leave your account balance in your old retirement plan.

4 Things You Can Do to Help Protect Your Retirement

No matter where you park your retirement funds after a job change, here are four things you can do to better protect your nest egg.

1. Request the Paperwork.

Ask the administrator of your plan for a copy of the plan’s summary plan description (SPD) and an individual benefit statement, the U.S. Department of Labor recommends. The SPD tells you what benefits the plan provides, when you can collect them, and—if you have a 401(k) account—whether your plan lets you roll your balance over to a new employer’s plan or an IRA. The individual benefit statement lets you monitor your account balance.

2. Don’t Neglect Your Retirement Funds.

This tip may sound like a no-brainer, but some folks focus more on their next job and its health insurance and other benefits than they do on the 401(k) or other work-based retirement funds when they’re switching jobs. Doing so could end up being a costly oversight.

While it’s usually okay to leave your money where it is, you could be losing out on monetary gains if you ignore your retirement funds. For instance, you might find it easier to track your retirement money if you roll your money over to an IRA when you leave a job, which also might be more beneficial from a financial standpoint.

And if you’re moving to a job that doesn’t offer a 401(k) retirement plan, there’s no need to worry. You can still safeguard savings for your golden years through a traditional IRA, Roth IRA, precious metals IRA, or brokerage account. Learn more about 401(k) alternatives here.

3. Consider Your Goals.

Whether you leave your retirement funds with your former employer, transfer them to a new employer, or shift them to your own IRA, you should make sure that your choice is tailored to your retirement needs. As such, you should weigh the retirement portfolio diversification and the cost of maintaining your portfolio.

4. Seek Professional Guidance.

Before making any moves with your retirement funds, consult a tax adviser or financial professional regarding how your money might be affected. A professional can help you ensure that these moves best fit your circumstances and goals. You also can contact U.S. Money Reserve for a free one-on-one consultation about Self-Directed Precious Metals IRA options. We can walk you through how precious metals can complement your retirement plans and support your goals, wherever you might be on your career path.

If you’re dealing with a recent career change, reach out. Contact U.S. Money Reserve to learn what more you could be doing to help protect your hard-earned nest egg in a time of flux.


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