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Should I Roll Over My Dormant Traditional 401(k)?

Assets and Investment Planning
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**This guide has been updated to incorporate new changes made by The SECURE Act 2.0 that are effective for the 2023 year. Any SECURE Act 2.0 changes that are effective for 2024 will be incorporated into this guide at the start of the 2024 year.

401(k)s and IRAs have many unique features that may be beneficial to your client, depending on their circumstances. The decision to roll funds out of a former employer’s plan involves more factors than just fees and investment selection.

To help make this analysis easier, we have created the “Should I Roll Over My Dormant Traditional 401(k)?” flowchart. It addresses some of the most common issues that should be considered before doing a rollover, including:

  • Common IRA and 401(k) features and differences
  • Net Unrealized Appreciation options
  • Age-based distribution options
  • Taxes and penalties in an IRA versus a 401(k)
  • Availability/existence of loans and the impact of a rollover
  • Hardship Withdrawals
  • Substantially Equal Periodic Payments


Updated 1/19/2023

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