What Should I Do With My 401(k) When I Retire or Change Jobs?

Your Guide from a Jacksonville-Based Fiduciary Advisor

When you retire or change jobs, your old 401(k) doesn’t just disappear, and what you do next can have a major impact on your long-term retirement and tax plan.

If you live in Jacksonville, Ponte Vedra, or anywhere in Northeast Florida, this is the ideal time to work with a local fiduciary advisor to evaluate the smartest move.

Option 1: Leave the 401(k) With Your Former Employer

Pros:

• No tax implications; assets remain tax-deferred

• Convenient if the plan offers low fees and solid investments

Cons:

• Limited flexibility

• No new contributions allowed

• Your old employer controls the plan rules, fees, and investment menu

This option may work short-term, but it can be hard to track, especially if you have multiple old 401(k)s scattered from previous jobs.

Option 2: Roll It Into an IRA (Most Flexible Choice)

Rolling over your 401(k) into an Individual Retirement Account (IRA) gives you complete control over the investment lineup, tax strategy, and withdrawal options. This is the most common choice we recommend at Atlantic Edge for professionals and retirees who want to actively manage their financial future.

Pros:

• More investment choices than most employer plans

• Easier to coordinate with Roth conversions, tax-loss harvesting, and planning strategies

• Allows for strategic withdrawal planning and estate optimization

• Can consolidate multiple 401(k)s into a single account for simplicity

Cons:

• You'll need to manage it yourself or hire a financial advisor

• You lose some ERISA protections offered by 401(k)s

If you're looking for personalized advice and local service in the Jacksonville area, rolling into an IRA with a trusted advisor can help align your investments with your long-term goals.

Option 3: Roll It Into Your New Employer’s 401(k)

If your new employer offers a high-quality retirement plan, it may make sense to consolidate everything under one roof.

Pros:

• Maintains ERISA protection

• Lets you delay RMDs if you're still working past 73

• Simplicity if you’re staying with the company for the long haul

Cons:

• Investment options and fees may not be as competitive

• Not all plans accept roll-ins

• Less flexibility than an IRA

Option 4: Cash It Out (Use Caution)

Pros:

• Immediate access to cash

Cons:

• Full income tax due in the year of withdrawal

• 10% penalty if under age 59½

• Eliminates future tax-deferred growth

In almost every case, we recommend against cashing out your 401(k) unless you have an urgent financial need and no other options.

Why Rolling to an IRA Often Makes the Most Sense

For professionals and retirees in Florida, especially those no longer working or transitioning careers, an IRA offers:

• Total investment control

• More flexible tax strategy options

• Easier integration with your retirement plan

• Simplicity when managing multiple accounts

And because Florida has no state income tax, your IRA withdrawals could be more tax-efficient than in high-tax states.

A Note for Jacksonville and Ponte Vedra Residents

At Atlantic Edge Private Wealth, based in Jacksonville, we work with individuals and families across Northeast Florida to simplify retirement transitions and optimize every account, including your old 401(k). 

Your Next Step: Make It a Strategic Decision

Choosing what to do with your 401(k) isn't just about fees and funds; it’s about creating a long-term strategy that fits your retirement goals and tax picture. With the right planning, your 401(k) rollover can become a core building block for wealth preservation, growth, and legacy planning.

If you live in Jacksonville, Ponte Vedra, or the surrounding area, and you're unsure what to do with your 401(k), we’re here to help. Let’s walk through your options together and make sure your retirement savings are working smarter.

Disclosures:

The information provided in this article is for informational and educational purposes only and should not be construed as personalized investment, tax, or legal advice. Atlantic Edge Private Wealth Management is an investment adviser registered with the U.S. Securities and Exchange Commission (SEC). Registration does not imply a certain level of skill or training. All investments involve risk, including the potential loss of principal. Past performance is not indicative of future results. You should consult your financial advisor, tax professional, or legal counsel before making any financial decisions.