401k Rollover vs Leave Behind 2027 Comparison

Compare 401k rollover (to IRA or new 401k) vs leave-behind 2027 — fees, investment options, loan availability, creditor protection differ.

401k Stay-Behind Pros

ERISA creditor protection. Age-55 rule (penalty-free withdrawal if separate at 55+). Loan availability if rehired. Free money management (some plans).

IRA Rollover Pros

Lower fees usually. More investment choices (3,000+ vs 15-30 in 401k). Easier Roth conversion. Consolidation reduces admin.

Direct vs Indirect Rollover

Direct: trustee-to-trustee. No tax withheld. Always do this. Indirect: check to you. 20% withheld for taxes. Must redeposit within 60 days. Risky.

New Employer's 401k

Usually allowed. Check vesting schedule of employer match. Sometimes cheaper than old 401k. Sometimes more limited investment options.

Source: irs.gov Publication 590-A rollover rules, dol.gov ERISA protections. Last updated: May 2026.

Frequently Asked Questions

Can I keep 401k at old employer?

Yes if balance >$5,000 (forced cash-out below). No penalty for leaving. Sometimes cheapest option if fees low.

Roth 401k → Roth IRA?

Yes. Same Roth-to-Roth direct rollover. No tax. Different 5-year clocks combined (use earliest start).

In-service rollover possible?

Some 401k plans allow rollover while still employed (in-service distribution). Usually only on portion past age 59½. Check plan.