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Highlights

1. When you switch jobs, your retirement plan remains intact; you must decide how to manage it.

2. Options include leaving funds in the plan, rolling over, or withdrawing.

3. Withdrawing early can lead to taxes and penalties, reducing savings.

4. Rolling over to an IRA or new employer’s plan often offers better investment control.

5. Check fees, investment options, and convenience before making a decision.

Switching jobs can be both exciting and overwhelming. In addition to the excitement of a new opportunity, there's a lot to think about, especially regarding your financial future. One of the most common questions is: "What should I do with my retirement savings?" 

If you're leaving a company that manages your 401(k) or retirement plan through One America, you'll need to make an important decision about your money. Therefore, knowing how to remove money from One America switching employers is important to avoid unnecessary penalties.

In this post, we'll break down options for you and help you handle the process so you can make the best decision for your financial goals. 

What Happens to Your Retirement Plan When You Switch Jobs?

When you leave a job, your 401(k) or other retirement plan doesn't just disappear. Your money is still there, but you must decide what to do. One America offers several options for managing retirement funds after switching employers. These options include leaving your money in the plan, rolling it over to another retirement account, or withdrawing the funds.

Let's discuss these options and figure out what might work best for you.

Leaving Your Money in the One America Plan

One of the easiest options is leaving money in your One America account, even after switching employers. This can be a good idea if:

• You're happy with the investment options and fees at One America.

• You don’t want to deal with moving the funds just yet.

• You prefer to manage multiple retirement accounts separately.

However, this isn't always the most efficient option. Some companies charge higher fees for former employees, and managing multiple accounts from different employers can become complicated. Make sure to check the fees and account rules before deciding to leave your money in the One America plan.

Withdrawing the Money

Withdrawing the money directly is an option, but it should be carefully considered. If you take money out of your retirement account before reaching retirement age, you may face hefty penalties and taxes. Specifically:

• The IRS may charge you a 10% early withdrawal penalty if you're under 59½ years old.

• You'll also owe income taxes on the amount you withdraw.

Withdrawing the money can seem tempting, especially if you need it for current expenses. However, the penalties and taxes can quickly eat into your savings, and you'll be sacrificing future growth on that money.

Rolling Over Your Funds to a New Retirement Account

Another common and often better option is rolling your retirement savings into a new account. You can transfer the funds into either:

1. A new employer's retirement plan: If your new job offers a 401(k) or similar retirement account, you can transfer funds from One America directly into that new account.

2. An individual retirement account (IRA): If you prefer more investment control, you can roll your funds into an IRA. This gives you more investment choices and flexibility in managing your retirement savings.

When considering rollover options after switching jobs, remember that rolling over into an IRA often provides more freedom in terms of investment options. On the other hand, moving the funds to your new employer's plan can help keep everything in one place for easier management.

It's important to complete the rollover properly. If you receive the funds directly and don’t deposit them into a new retirement account within 60 days, you may face taxes and penalties. By doing a "direct rollover," where the money goes directly from One America to your new account, you can avoid these issues.

How Does the Rollover Process Work?

The process for rolling over funds from One America to another retirement account is simple:

1. Contact One America: Reach out to their customer service team and let them know you'd like to roll over your account. They'll guide you through the steps and provide any necessary forms.

2. Choose where to roll over your funds: Decide whether you want to roll over the funds into your new employer's plan or an IRA.

3. Complete the rollover: Follow the instructions provided by One America to transfer your funds. In a direct rollover, the money is transferred electronically to the new account, so you don’t have to worry about handling the money yourself.

Retirement Savings Transition After Employment Change

Managing your retirement savings during a career transition can feel overwhelming, but it’s essential for securing your financial future. A smooth retirement savings transition after employment change ensures your money continues growing and working for you without unnecessary fees, penalties, or tax consequences.

The key is understanding your options and choosing the one that fits your long-term financial goals. Rolling over your funds or leaving them in the One America account are the most popular choices, while withdrawing the money should generally be avoided due to the high penalties involved.

Important Considerations When Switching Jobs

When deciding what to do with your retirement funds after leaving One America, consider the following:

• Fees: Compare the fees in your current One America plan with those in your new employer’s plan or an IRA. Lower fees mean more of your money stays invested for the long term.

• Investment options: Different retirement accounts offer different investment choices. If you prefer more control, rolling over into an IRA might be your best bet. However, if you’re happy with the investment options at your new employer, rolling your funds into their plan could make sense.

• Convenience: Managing multiple accounts can be a hassle. If consolidating everything into one plan appeals to you, moving the funds into your new employer’s plan may make things easier to manage.

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Summary

Knowing how to remove money from One America switching employers is essential to managing your financial future when you change jobs. Whether you leave your funds in the One America account, roll them over, or transfer them to an IRA, making an informed decision that aligns with your retirement goals is crucial. By making smart choices, you'll ensure that your retirement savings continue to grow as you advance in your career.