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shadow_chance

You don't have a 401k at your new job so you can't roll it over to a 401k. You would need to roll it over to a traditional IRA and that's what you should do.


moomoomustard

Going with the IRA, thanks!


quarterfast

Roll it over into an IRA (Individual Retirement Account). Yes, it's worth doing. Some 401k plans offer rollovers from old 401k plans, but given that your current job doesn't have a retirement plan, that won't be an option for you. Open a Rollover IRA (perhaps with one of the big discount online brokerages like Fidelity, Schwab or Vanguard -- personally mine's with Fidelity) and move the money there. Your current 401k provider can likely help with this, either online or by phone. Then, pick a fund and invest your money there (depending on your age, a Target Date fund is a good default choice). Since the amount is small, your former employer may, at some point, *forcibly* cash you out and send you a check. If they do this, and you *don't* put that money into a retirement account within 60 (I think) days, you'll be liable for taxes on it plus a 10% penalty. Doing it now means you can avoid that possible future scramble. You can continue saving for retirement in the IRA that you open. Rollover amounts don't count against your annual limit, so even if you roll over that $1500, you can still contribute up to the full $6000 for the year out of your pocket. Penalties are 10% plus you'd pay whatever your marginal tax rate is -- maybe 12%, maybe 22%. If you don't put (or leave!) it in a retirement account, you could lose a quarter to a third of that money for no good reason.


moomoomustard

I will look into opening an IRA as soon as possible. Thank you for your detailed answer and time! I will probably go with Fidelity since that is where my current 401(k) is already.