Option 2: Roll it over to your new employer’s account
One of the job perks your new company may offer is a 401(k) or a similar tax-advantaged retirement account. If you'd rather not have to keep up with two employer-sponsored plans or your new job's plan is more attractive, a transfer may be the answer.
With this type of transfer, you're taking the assets from your previous retirement account provider and investing them with a new one. There's a bit of paperwork involved to complete the process, but there are some definite benefits you might appreciate.
Aside from keeping your savings tax-deferred, you're able to add to it by making contributions to the new plan. If the fees for the new plan are lower than the old one, that means you're holding on to more of your returns year over year. Your employer may offer access to financial planning professionals, tools, or resources to help guide your investment and saving decisions. If your plan allows for loans, you'd have a last resort source of cash you could tap in an emergency.
Of course, it's important to evaluate the new plan before transferring. A transfer may lose some of its appeal if there are fewer investment choices, the available investments don't exactly align with your goals and preferences, or the plan is more expensive. You'll also need to know whether transfers from other plans are allowed and what conditions, if any, you have to meet before you can invest the funds.