What to do with 401(k) When Leaving
Upon making the decision you’re leaving Dow Aero, LLC (“Company”), employees with a balance within their 401(k) account will need to consider which option to choose from to receive their balance. We encourage that employees carefully evaluate the following options and recommend speaking with a tax or financial advisor about your personal situation.
Available Options
Move your account (rollover) to your new employer’s plan (if available)
401(k) assets in one place;
Continued preferential tax treatment; and
Assets protected from creditors.
Move your account (rollover) to an Individual Retirement Account (IRA)
Continued preferential tax treatment;
Potentially more flexibility in investments and access; and
If Betterment IRA, continued access to Betterment investment platform and strategies.
Take the money out of the plan (“cash out”)
Money no longer working for your retirement;
Twenty-percent (20%) withheld in federal taxes; and
Possible ten-percent (10%) in penalties if less than fifty-nine and a half (59 ½) years old.
Leave your funds in the Dow Aero 401(k) Plan
Continued access to Betterment platform and strategies;
Continued preferential tax treatment;
Multiple accounts may complicate your retirement savings oversight;
Assets protected from creditors.
If your balance is below five-thousand dollars ($5,000), your will be required to take one of the following actions above, or your money will be taken out of the plan (“cash out”) automatically after six (6) months of your termination date from the Company.
Select here for further advise about choosing whether to rollover to another 401(k) plan or IRA >
Action Steps
Review your 401(k) account to be sure it contains your current contact information and is associated with your personal email address.
If rolling over or cashing out, start a withdrawal.