When you leave a job, whether you leave voluntarily, are laid off, or are fired you generally have five options.

  1. You can rollover your 401(k) to an IRA. The benefit of this is that when you roll over to an IRA you open up the choices for investment. A 401k frequently has 15-25 choices to invest in whereas and IRA has thousands of choices. This gives you the option to custom build a portfolio that matches your needs. That could possibly mean better performance in the long run, especially because you have more control over fees as well. The downside is that you generally cannot take a loan from an IRA. You can access the money as a withdrawal but if you don’t put the money back within 60 days it is considered a distribution.
  2. You can roll it into the 401(k) at your new company. When rolling your 401k to your new company, make sure to evaluate their plan provisions. Some plans allow loans other do not. If your plan allows loans, you may be able to borrow up to $50,000 or 50% (whichever is less) of your 401k’s vested balance. Many companies allow you to set up a payback schedule that can last over 5 years but there may be additional restrictions such as not being able to make further contributions to the plan and tax penalties if the loan is not replayed in a timely manner. These loans generally become due should employment be terminated and could result in additional tax liability for the employee if not paid back in full.
  3. You can leave it at the company you just left. Most plans will allow this as long as your balance is over a specific limit set by the company. There are some risks to doing this. Some companies that pay the majority of the administrative fees will stop paying them for you when you are no longer employed, which means you may see a jump in expenses without realizing it. This can eat away at your potential growth.
  4. You can roll it into a self-directed IRA. This type of account allows you to invest in assets outside of the stock market. You can use this structure to acquire real estate or other private investments.
  5. The last option you have is to cash out the account. If you are below 59 and a half, you will pay ordinary income tax plus a 10% penalty. This is generally a last resort option if you need the cash.

Mary Lyons began her financial career as a young girl. A second-generation financial advisor, Mary’s fascination with investment planning started at dinner conversations with her parents, understanding wealth as a tool rather than an end goal. As Mary grew up, so did her interest and experience. Today, branded as The Wealth Woman, she is recognized as the top 1% nationwide in the industry. Mary also consistently receives the Chairman’s Council Award, presented to the top ten advisors with the companies of OneAmerica®.

In 2020 Mary’s success as a financial advisor allowed her to launch Benchmark Income Group™.  She has brought together a team of talented financial advisors and staff with one goal in mind: to help create the means for clients to live their best life. Mary shares her strategies with the talented team of Benchmark Income Group™ so they can serve more clients seeking to live a purposeful life. Within in seven months of launching the company revenue had already exceeded a million dollars.

With the recognition Mary has earned, she teaches her ideas and methods at national conferences, consults with the industry’s best, and trains advisors in top firms across the United States. She is co-host of the popular podcast “The BIG Wealth Podcast,” and she has been interviewed for local, national, and international news programs as well as Yahoo Finance and MSN.

State Licensure

Insurance: FL, IN, LA, MI, NC, NM, NV, OK, SC, TX

Securities (FINRA Series 7 & 66): TX

Website: https://wealthwoman.com/ and https://benchmarkincome.com/

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Podcast: https://podcasts.apple.com/us/podcast/the-big-wealth-podcast/id1551046548

Registered Representative and Investment Advisor Representative of and securities offered through OneAmerica Securities, Inc., a Registered Investment Advisor, Member FINRA, SIPC. Benchmark Income Group is not an affiliate of OneAmerica Securities and is not a broker dealer or Registered Investment Advisor. Provided content is for overview and informational purposes only and is not intended and should not be relied upon as individualized tax, legal, fiduciary, or investment advice.

These concepts were derived under current laws and regulations. Changes in the law or regulations may affect the information provided. Neither Benchmark Income Group, nor their representatives provide tax or legal advice. For answers to specific questions and before making any decisions, please consult a qualified attorney or tax advisor.