How Does Changing Jobs Affect Your Investment Strategies?

FICadmin |

Upward mobility. Those are two important words when considering career advancement. This often includes switching employers, which can be  a positive step to make, but how does this impact your investment strategies? If you’ve been steadily building up your retirement savings, you need to make some crucial decisions as you change employers so your investments can continue moving in the right direction.

What to Do With Your 401(k)

One of the first things that will cross your mind in regard to investment strategies is, “What do I do with my vested balance in my 401(k) or 403(b)?” It may be easier to leave it with your former employer, but you have to be happy with the investment choices your former employer makes with the company plan. This can also make managing accounts more difficult if you’re setting up a new 401(k) with your new employer, because rather than just checking one plan, you now need to look at two.

On the plus side, it requires nothing of you to leave it where it is, and you continue your tax-deferred growth potential while it’s there. If you’ve taken a look at the investment choices made by your new employer and you don’t feel they are a good match for you, you can leave them with your former employer.


Does your current employer, or former employer, have a staggered vesting plan? Almost half of all retirement plans stagger theirs around 20 percent a year. That means if you leave the job before vesting is complete, some of the employer’s match will be lost. Check with your company’s plan manager, because some will vest immediately while others will only fully vest after you’ve been employed for a certain period of time.

Cashing Out

If you’re thinking about taking the cash and putting it in your bank, you need to consider the consequences. Not only will you not move forward earning potential investment growth, but you’ll also be subjected to taxes on your withdrawal, and an early-withdrawal penalty if you’re under a certain age.

Rolling To an IRA

If you’re looking for more investment options, rolling your savings into an IRA might be a good thing to consider, because this could increase your options.

Another perk with rolling it into an IRA is that you’re consolidating into one account, which is helpful in managing your investments. You also enjoy tax-deferred growth until it’s time to begin taking disbursements. The downside is that your fees might be higher in an IRA than in other vehicles, so it’s important to check on all fees and expenses before making a move.

At Family Investment Center, we’re here to listen to you about your retirement goals and find a way to get you there. With financial planning and investment management services, we can handle your career changes and all the things that go along with them. Contact us and let’s get started on the future you want.


Let’s plan for some serious freedom.

Get Started