When changing employment,your 401(k)account _________________.

Question

Quizplus · Accepted Answer

When changing employment, it is generally best to transfer your 401(k) account to another plan administrator, like a mutual fund company or your new employer's plan. This allows you to keep your retirement savings intact and avoid early withdrawal penalties or taxes on the entire amount. Rolling over the funds into an IRA is also an option, but may not be the best choice for everyone depending on individual circumstances. Option A is incorrect because you are allowed to move your 401(k) account even if you leave your employer. Option B is incorrect because withdrawing your 401(k) balance before age 59½ will generally result in a 10% penalty, plus income taxes on the entire amount. Option D is incorrect because you are allowed to roll over your 401(k) into an IRA, though it may not be the best choice for everyone.

When Changing Employment,your 401(k)account _________________