American Funds:

Options when leaving a job

Leaving a job or retiring is a big change in your life. While you’re anticipating all the adjustments ahead, don’t neglect your retirement plan assets. You have a lot of options for what to do with your money. This chart can help you figure out which option is best for you:

Rollover to an IRA	Move to a new retirement plan	Stay in your old retirement plan	Cash out
Benefits Your money has the potential to keep growing tax-deferred. You may be able to expand your investment choices beyond your plan’s options. You can consolidate multiple retirement accounts. Generally, you can make your own contributions to your rollover IRA.	Benefits Your money has the potential to keep growing tax-deferred. You have your retirement assets conveniently consolidated with one provider.	Benefits Your money has the potential to keep growing tax-deferred. You can keep your assets in the same investments.	Benefits You have cash in hand to take care of current needs.
Keep in mind Roth 401(k) or 403(b) accounts will be rolled into a Roth IRA. Non-Roth accounts can be rolled into a traditional or Roth IRA. You’ll be responsible for any unpaid taxes on the taxable portion of a Roth IRA rollover. You can avoid required minimum distributions over your lifetime with a Roth IRA. With retirement plan accounts and traditional IRAs, you’re generally required to withdraw a certain amount every year once you reach age 70-1/2. If you’re rolling to a traditional IRA, make sure the rollover funds go directly from your old plan’s trustee to the rollover IRA’s trustee or custodian to avoid having income tax withheld on the taxable portion of your distribution.	Keep in mind The plan may not accept certain types of rollovers from other plans, or Roth or after-tax money. Make sure the rollover funds go directly from your old plan’s trustee to your new plan’s trustee to avoid having income tax withheld on the taxable portion of your distribution. There may be a waiting period before you can move your money into your new plan. Your investment options are limited to what is offered in your new plan. You’re subject to the rules and restrictions of your new plan.	Keep in mind Your investment options are limited to what is offered in the plan. You’re still subject to the rules and restrictions of the plan. If your account balance is $1,000 or less, your plan might cash you out. If your balance is between $1,000 and $5,000, your plan might roll your balance into an IRA selected by your former employer.	Keep in mind Any money you spend now will not be there for you at retirement. Your employer must withhold 20% of the taxable portion of your distribution for federal income taxes. You may owe more at tax time. A 10% early withdrawal penalty may apply if you’re under age 59-1/2. If you’re 55 or older when you leave your job, withdrawals are penalty-free but still taxable. Other exceptions may apply. Withdrawals from Roth accounts are tax- and penalty-free if the account was established at least five years before, and if you are at least 59-1/2 years of age, are disabled or have died. You may owe state and local taxes on the taxable portion of your distribution.

Rollover to an IRA

Move to a new retirement plan

Stay in your old retirement plan

Cash out

Benefits

Your money has the potential to keep growing tax-deferred.
You may be able to expand your investment choices beyond your plan’s options.
You can consolidate multiple retirement accounts.
Generally, you can make your own contributions to your rollover IRA.

Benefits

Your money has the potential to keep growing tax-deferred.
You have your retirement assets conveniently consolidated with one provider.

Benefits

Your money has the potential to keep growing tax-deferred.
You can keep your assets in the same investments.

Benefits

You have cash in hand to take care of current needs.

Keep in mind

Roth 401(k) or 403(b) accounts will be rolled into a Roth IRA. Non-Roth accounts can be rolled into a traditional or Roth IRA. You’ll be responsible for any unpaid taxes on the taxable portion of a Roth IRA rollover.
You can avoid required minimum distributions over your lifetime with a Roth IRA. With retirement plan accounts and traditional IRAs, you’re generally required to withdraw a certain amount every year once you reach age 70-1/2.
If you’re rolling to a traditional IRA, make sure the rollover funds go directly from your old plan’s trustee to the rollover IRA’s trustee or custodian to avoid having income tax withheld on the taxable portion of your distribution.

Keep in mind

The plan may not accept certain types of rollovers from other plans, or Roth or after-tax money.
Make sure the rollover funds go directly from your old plan’s trustee to your new plan’s trustee to avoid having income tax withheld on the taxable portion of your distribution.
There may be a waiting period before you can move your money into your new plan.
Your investment options are limited to what is offered in your new plan.
You’re subject to the rules and restrictions of your new plan.

Keep in mind

Your investment options are limited to what is offered in the plan.
You’re still subject to the rules and restrictions of the plan.
If your account balance is $1,000 or less, your plan might cash you out. If your balance is between $1,000 and $5,000, your plan might roll your balance into an IRA selected by your former employer.

Keep in mind

Any money you spend now will not be there for you at retirement.
Your employer must withhold 20% of the taxable portion of your distribution for federal income taxes. You may owe more at tax time.
A 10% early withdrawal penalty may apply if you’re under age 59-1/2. If you’re 55 or older when you leave your job, withdrawals are penalty-free but still taxable. Other exceptions may apply.
Withdrawals from Roth accounts are tax- and penalty-free if the account was established at least five years before, and if you are at least 59-1/2 years of age, are disabled or have died.
You may owe state and local taxes on the taxable portion of your distribution.

Next steps:

Use our Spend It or Save It Calculator. Measure the tax implications and penalties of staying tax-deferred and cashing out with this simple tool.
Talk to your financial professional to make sure your decision is the right one for you. Consider your distribution options and their tax implications carefully.
Initiate a transaction. If you’ve decided to roll over, move or cash out plan assets, you can initiate a withdrawal on this website. Once you’ve logged in to your account, click on Withdrawal Request under the Withdrawals tile on the main menu.
Call the American Funds IRA Rollover Center if you have additional questions. IRA Rollover Specialists are available Monday through Friday from 8:00 a.m. to 8:00 p.m. Eastern time at (800) 421-9923.

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Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so they may lose value.

Investors should carefully consider investment objectives, risks, charges and expenses. This and other important information is contained in fund prospectuses, summary prospectuses and similar documents available from your plan’s financial professional or after logging in to your account, going to Investments and clicking on Investment options. Read this information carefully before investing.