What happens to my 401(k) if I change jobs?

You can leave it, roll to your new employer's 401(k), or roll to an IRA. Rolling to an IRA often gives more fund choices and lower fees. Avoid cashing out—penalties and taxes apply.

Should I max out my 401(k)?

After getting the full match, prioritize based on your situation. Pay high-interest debt first. If you can afford it, maxing the 401(k) is excellent for retirement. Otherwise, max match, then IRA, then more 401(k).

What's a good 401(k) allocation?

A target-date fund matching your retirement year is the simplest—it auto-adjusts over time. Or use a broad US stock fund + bond fund if you want more control.

401(k) Explained: Employer-Sponsored Retirement Plans | Investors Lab

What Is a 401(k)?

A 401(k) is an employer-sponsored retirement account. You contribute pre-tax dollars (or Roth if offered), and your employer may match a portion. Money grows tax-deferred until withdrawal.

Employer Match—Free Money

Many employers match part of your contributions (e.g., 50% of first 6% of salary). Always contribute at least enough to get the full match. It's an instant 50–100% return. Passing it up is like leaving money on the table.

Contribution Limits (2024)

Employee: $23,000 ($30,500 if 50+)
Total (employee + employer): $69,000
Limits adjust for inflation annually

Traditional vs. Roth 401(k)

Traditional: Reduces taxable income now. Withdrawals taxed in retirement.
Roth 401(k): After-tax contributions. Withdrawals tax-free. Not all plans offer it.

Investment Options

401(k)s offer a menu of funds—often target-date funds, index funds, and actively managed funds. Choose low-cost index options when available. Target-date funds are a simple default—pick the year closest to your retirement.

When You Change Jobs

Options: Leave with old employer, roll to new 401(k), or roll to IRA. Rolling to an IRA often gives more investment choices. Don't cash out—taxes and penalties will apply.