If you’re planning on leaving your current employer, you may be wondering what will happen to your retirement savings. Whether you’ve been working at the company for a year or a decade, you have a number of 401(k) rollover options to consider. Naturally, the best approach will depend on a variety of factors, including the total account balance, your long-term financial goals, and the plan’s flexibility. Here’s what you need to know.

4 401(k) Rollover Options Worth Exploring

1. Leave the Funds

Depending on the circumstances, it may be possible to leave your savings in your prior employer’s plan. Generally speaking, this is an option if you have at least $5,000 in the account.

2. Transfer the Funds

If your new employer offers a 401(k) plan that permits rollovers, transferring the old funds to the new account is a simple solution. This will allow you to continue saving for retirement—and to take advantage of any new match programs—without missing a beat.

3. Modify the Account

If the account has between $1,000 and $5,000, and you’re being forced out of your old job, your employer will likely have to help you set up an individual retirement account (IRA). You may still take this approach if you have more than $5,000 saved for retirement, but your employer won't automatically facilitate the change. Instead, you’ll have to take the lead.

4. Cash Out the Balance

Many individuals opt to cash out their 401(k) upon changing jobs. If you’re under 59 1/2, though, you’ll have to account for the tax obligations that come with making early withdrawals. In most cases, there is a 10% penalty tax on top of the standard income tax for such distributions; however, the penalty does not apply to those who retire between 55 and 59 1/2.

Unless you have a background in retirement planning, choosing from among the 401(k) rollover options can pose a challenge. That's why it pays to work with a trusted financial planner from Family Financial Partners. Headquartered in Lexington, KY, their team of financial advisers and investment planners has helped numerous clients with 401(k) rollovers and other aspects of retirement planning since 2005. Call (859) 219-1006 for an initial consultation, or go online to learn how they can help you today. You can also visit feeforplan.com for more information about financial plans tailored to your unique stage of life.

The tax planning information contained herein is general in nature, is provided for informational purposes only, and should not be construed as tax advice. Please consult with your tax professional for guidance regarding tax-related matters.