What to Do With an Old 401(k): Your Options in Minnesota

Where is your money? If you have changed jobs a few times, the answer may be more places than you remember. Knowing what to do with an old 401(k) starts with finding it, then choosing among four options. The choice affects how the money is invested, taxed, and passed to your family.

When you start a new job, the excitement crowds out almost everything else. Picking an insurance plan, signing up for the 401(k), finding a good parking spot, getting to know the people down the hall. That is the fun part. The loose ends from the old job, including the retirement account you left behind, tend to wait.

Job changes add up. The Bureau of Labor Statistics found that people born from 1957 to 1964 held an average of 12.9 jobs between ages 18 and 58. Not every job came with a retirement plan, but plenty of people reach their fifties with an account at two or three former employers. I have met with several people in exactly that spot recently. There can be good reasons to leave money in an old plan for a while. There are also good reasons to take another look and take control of your retirement money.

How to find an old 401(k)

Accounts get lost in the shuffle of real life, especially when a former employer merges, is sold, or changes plan providers. Start with what you already have.

• Old statements or emails from the plan. The plan administrator's name and phone number are usually on them.
• Old W-2 forms. A code D in box 12 means you put money into a 401(k) that year, which tells you which employers to ask about.
• The former employer's HR or benefits office. If the company merged or was sold, ask who took over the retirement plan.
• The U.S. Department of Labor's Retirement Savings Lost and Found database, created under the SECURE 2.0 Act. You verify your identity through Login.gov and search by your Social Security number.

As you find each account, write down the plan, the administrator, the balance, and the beneficiary on file. That one page is the start of a plan, and it is the page your family would need if something happened to you.

Four signs an old 401(k) needs attention

You are not sure what it is invested in

Many people do not remember how an old plan is invested, and a mix nobody is managing drifts out of balance as some holdings grow faster than others, and the account slowly turns into something you did not choose.

The fees are bigger than they look

Markets change, and investments that fit when you picked them may not fit now. One person I met had money in an old bond fund that returned about 1.9% a year over the last three years while charging a 1.86% annual fee. When it was first picked, that fund was earning 5% to 6%. The market changed and the fund did not, but the fee kept coming out every year.

Your timeline changed and the investments did not

Another client had everything in a target date fund built for a 2020 retirement. Their plans changed and they kept working, but the fund kept getting more conservative on schedule, because that is what a target date fund is designed to do. For six years, money they did not plan to touch for a while was invested as if they had already retired.

The beneficiary form is out of date

A 401(k) passes by its beneficiary form, not by your will. A form you filled out on your first day at a job fifteen years ago may not match your life today: a marriage, a divorce, a child, a death. And if something happens to you, your family would have to track down every account and every plan administrator before they could even ask the question.

Not sure what is in your old plan? Bring your latest statements. We can walk through what you own, what it costs, who is named as beneficiary, and whether it still fits your plans. The first conversation puts you under no obligation. Talk with a trust officer

Your four options for an old 401(k)

Each choice has trade-offs. Here they are side by side, then in more detail.

Leave it with your former employer

This is usually a short-term choice. Money in an employer plan covered by federal ERISA rules is generally out of reach of creditors. If you left the job in or after the year you turned 55, you can generally take withdrawals from that employer's plan without the 10% early withdrawal tax, an exception that does not carry over to an IRA. If you stay, keep an eye on the fees, the returns, and the investment choices the plan offers former employees.

Move it to your new employer's plan

Many workplace plans accept rollovers from a former employer's plan. It keeps things in one place, and if you work past 73, your current employer's plan may let you wait until you retire to start required distributions, which old plans and IRAs do not. The trade-off is that your fund choices are limited to the new plan's menu, and the money follows the new plan's rules on withdrawals and loans. If you left the old job at 55 or older, moving the money can give up that access without the 10% tax.

Roll it into an IRA

You can roll the money into an IRA at a bank, a brokerage firm, or a trust department. An IRA generally gives you a wider choice of investments and more control over how the money is invested. Some IRAs hold bank deposits such as CDs, and others hold investments such as mutual funds and bonds. They are different products with different protections, so ask which one you are opening. A rollover IRA can also be self-directed, where you pick and watch the investments, or managed, where a professional does that for a fee. Outside bankruptcy, Minnesota protects IRAs from creditors up to a dollar limit that is adjusted every two years, so if that matters to you, ask your attorney.

Cash it out

Cashing out is usually the most expensive choice. The plan withholds 20%, the full amount counts as income for the year, and under 59½ an additional 10% tax generally applies. If a hardship means you need the money now, understand what it costs before you sign.

How a 401(k) rollover to an IRA works

• Open the receiving IRA first, so you have the account information the old plan will ask for.
• Ask the old plan for a distribution form. Choose a direct rollover on it, so the money goes straight to the new IRA for your benefit and no tax is withheld.
• Keep pre-tax and Roth money apart. Pre-tax money goes to a traditional IRA and Roth 401(k) money goes to a Roth IRA. Moving pre-tax money into a Roth IRA is a conversion, and the amount converted is taxable income that year.
• Check for an unpaid 401(k) loan. IRAs do not allow loans. If you leave with a loan balance, the plan may subtract it from your account, and you have until your tax filing deadline, including extensions, to roll over that amount.
• Ask before you move company stock. If your old plan holds your former employer's stock, rolling it into an IRA gives up a tax treatment called net unrealized appreciation. Talk with your tax professional first.

The mistake to avoid is a check made out to you. The plan withholds 20%, and you have 60 days to deposit the full amount, including the 20% you did not receive, using other money. Whatever you do not roll over is taxed, and the 10% additional tax may apply too. A direct rollover avoids that problem. The IRS explains the rules on its rollovers page.

A rollover IRA managed by our Trust Department

Most people who leave a job leave the money in investments that were a good choice when they picked them. Things change. A rollover IRA with our Trust Department is a managed account. We invest it under an agreement you sign, review it regularly, rebalance when it drifts, keep track of how each fund performs and what it costs, and adjust the mix as your goals change. We act as a fiduciary on the account, so our job is your interest, not your employer's.

It also connects to the rest of your planning. Our Trust Department administers IRAs and inherited IRAs as a standing part of its work, and Tina Rosckes, Senior VP, Trust, holds the Certified IRA Services Professional designation. When it is time to name a beneficiary, or to decide whether your trust should be the beneficiary of your IRA, the people managing the account are the same people who serve as trustee and settle estates. If you are weighing who that should be, start with choosing a trustee in Minnesota.

You stay in control. You name your beneficiaries and can change them as your life changes. We work with clients from Glencoe and Waconia to Wayzata and Cambridge, and if you are deciding between a trust department and an independent advisor, we wrote about how a bank trust department compares with a financial advisor.

You focus on your life. We'll keep watch on the money.

Common questions about old 401(k) accounts

How do I find a 401(k) from an old job?

Check old plan statements and W-2 forms (code D in box 12 marks 401(k) contributions), then call the former employer's HR office. If the company has merged or closed, search the Department of Labor's Retirement Savings Lost and Found database.

What happens to a small 401(k) balance when I leave a job?

A plan may pay out a vested balance of $7,000 or less without your consent. If that payout is over $1,000 and you make no choice, the plan must roll it into an IRA opened in your name. Smaller amounts can be sent to you as a check, which is taxable.

Can I roll my 401(k) into my bank account?

Not as a rollover. Money moved into a checking or savings account is a cash-out, with income tax and possibly the 10% additional tax. A 401(k) can roll into an IRA, and that IRA can be held at a bank or its trust department.

Bring your statements

I would love to review your statements with you. Each account is different, and comparing fees, fund expenses, and advisory fees apples to apples can be confusing. We are here to cut through the confusion, help you make an informed decision, and put it in place. As a fiduciary team, we comply with the DOL fiduciary rules by discussing why a rollover recommendation to an IRA is in the best interest of the client. Talk with a trust officer, call one of us directly from the trust team page, or stop in at any of our 21 branches across 18 Minnesota communities.

• Tyler Miller Wealth Management Associate, Trust IRAs, rollovers, and investment accounts.
• Tina Rosckes Senior VP, Trust, CISP, CTFA IRAs, inherited IRAs, and special needs trusts.

Fiduciary guidance. Personalized planning. Ongoing support.

Talk with a trust officer See how our trust team works

• Keep reading
• Bank trust department vs. financial advisor for how the two differ and what the fee pays for.
• Choosing a trustee in Minnesota for who would manage things for your family if you could not.
• Funding a trust in Minnesota for which assets get retitled and which pass by beneficiary form.
• Trust and wealth management for IRAs, inherited IRAs, and the full trust team.
• Locations for all 21 branches across 18 Minnesota communities.

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Growing, together.

The client stories in this post come from real conversations, with details changed to protect privacy. Nothing in this post is a recommendation for any individual's investments. Investment products held in a trust or IRA account are not FDIC insured, are not bank guaranteed, may lose value, and involve investment risk, including possible loss of the principal amount invested. Past performance cannot guarantee future results. Our services do not constitute legal or tax advice; please consult your attorney or tax professional to determine how this information may apply to your own situation. Page last reviewed November 2026.