"I just need to roll my old 401(k) into my new one, right?"
Not necessarily.
A client recently planned to roll her old 401(k) into her new one—until we talked through her and her husband's goal of buying a home. We took a different approach 👇
✅ Roth 401(k) → Roth IRA (Invested Aggressively)
→ More liquid than a Roth 401(k).
→ Contributions can be withdrawn anytime, penalty- and tax-free.
✅ Pre-tax 401(k) → Traditional IRA (Kept in cash for flexibility)
→ Her company match was pre-tax, even though she contributed to Roth.
→ This keeps the $10K first-time homebuyer exception available (penalty-free, but still taxable).
→ If they don’t use it for the home, we’ll convert to Roth and invest for long-term growth.
Key takeaways:
1️⃣ Just because you can roll over a 401(k) doesn’t mean you should.
2️⃣ HR teams mean well, but if they don’t know your full picture, their advice can cost you.
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Disclosures: thrivent.com/social
There may be benefits to leaving your account in your employer plan, if allowed. You will continue to benefit from tax deferral, there may be investment options unique to your plan, fees and expenses may be lower, plan assets have unlimited protection from creditors under Federal law, there is a possibility for loans, and distributions are penalty free if you terminate service at age 55+. Consult your tax professional prior to requesting a rollover from your employer plan.
