Rescue Your Old, Low-Balance 401k Before It's Kicked To The Curb In 2024

If you have a dusty, half-forgotten 401(k) from a previous job, there’s new pressure to get around to doing something with it — before your old company does something to it that you don’t like.

  • Since 2001, 401(k) sponsors have been allowed to automatically boot you out of their plan and into an IRA account if your balance was between $1,001 and $5,000.
  • In 2024, that upper limit is moving to $7,000, exposing an estimated 800,000 more people to involuntary rollovers.
  • If your old 401(k) balance is under $1,000, the treatment could be even uglier. Employers can just cash you out, exposing you to ordinary income tax on the account balance, plus a 10% penalty if you’re under age 59 1/2.

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