When Is the Right Time to Roll Over an Existing 401(k)?

After leaving a former employer, you’re likely to be left with an employer-sponsored 401(k) account that you’ve invested in over the years. You have a few options for what you can do with this retirement account.

One of the most popular choices is to roll it over into an IRA or your current employer’s 401(k) plan. However, it’s important to think carefully before making this move. Rolling over may be the best choice in some instances, but it could be a mistake in others. If your former employer allows you to maintain your 401(k)/IRA with their company, this could be the better move.

Here are a few considerations to help you decide whether now is the right time to roll over your existing 401(k).

Fees and expenses

IRA and 401(k) plans come with differing fees and expenses for managing and administering the accounts. These expenses might not be totally obvious at first glance, but they are very important to dig into before making decisions about rolling over.

If the plan you’re considering rolling your 401(k) into has higher fees, consider the impact that might have on your overall account. Sometimes, choosing to maintain the former retirement account with lower fees can net you more money in the long run.

Investment options

Similarly, different accounts will offer different investment options. If you prefer to take a more hands-on approach to your investments, you’ll want to consider the options available in your retirement account choices and either stay or roll the account over to take advantage of the most appealing investments.


If convenience is important to you, it might be best to roll your retirement funds into your new employer’s 401(k) plan or IRA. This will consolidate your funds and allow you to monitor and control investments in one place, instead of multiple.


Rolling over an existing 401(k) might be a smart move if you have a reason to use the money to your advantage. One major reason you might consider this is if you want to open a small business or franchise. Entrepreneurs can leverage an existing 401(k) or IRA through a rollover as business startup (ROBS).

This process allows you to roll your retirement funds into a new self-directed 401(k) that invests in your business, putting your hard-earned retirement funds directly toward your dream of running your own business! This process is IRA-approved, is not a loan, and is has no penalties, unlike taking a traditional distribution from a retirement account.

Maintain control over your financial future

Any time you leave an employer, you should carefully consider your options before deciding to roll over your retirement funds. There are some instances where not rolling over might be the best decision, and there are others in which rolling over and using the money to your advantage is the right choice for your financial future.

If you’re interested in using an existing 401(k) to capitalize a new business through ROBS, Tenet Financial Group is here to help. We will help you navigate the requirements of this strategy so you can put your retirement funds to work for you. Contact us today to learn more.