A 401(k)rollover typically occurs when a 401(k) plan participant begins a new job or is about to retire. A decision must be made about what to do with a 401(k) or similar employer-sponsored retirement account.
The participant may elect to leave the 401(k) account with the current employer, roll it over to the new employer’s plan if eligible, roll the money into an individual retirement account (IRA), or withdraw the money as cash. Benefits and penalties are associated with each option.