What happens to your old 401(k) when you leave a job

By Sivaprasad Kotta, Kotta Financial Services | June 12, 2026

Your four options

1. Leave it where it is — limited funds, possible higher fees for former employees
2. Roll into your new employer's 401(k) — consolidates, but still limited fund options
3. Roll into an IRA — thousands of investment options, full control, tax-deferred growth
4. Roll into an annuity — guarantees lifetime income, principal protection, growth potential

The rollover is tax-free

A direct rollover (custodian to custodian) incurs no taxes or penalties. No age requirement. According to the IRS, direct rollovers avoid the mandatory 20% withholding that applies to distributions.

When an annuity rollover makes sense

Example: $200,000 at age 50 in an indexed annuity — principal protected from market losses, growth tied to S&P 500, guaranteed income of $1,500-$2,000/month starting at 65 for life.

Phone: (919) 645-8723 | Free rollover consultation