Retirement Plan Considerations when Changing Jobs

Jul 11, 2023

Changing jobs can be an exciting yet stressful time in your life. Even though managing your finances may not be on your priority list, it is important to devote time to planning. And when it comes to your company-sponsored retirement plan, there are a few things to consider.

New Company Retirement Plan

One of the first important things to do when starting a new job is to check if your new company offers a sponsored retirement plan, such as a 401(k) or 403(b).

These are great ways to save for retirement.

Assuming the company does offer such a plan, you will first need to decide how much to contribute. Although this amount will vary depending on your financial situation, the limit to contribute to most of these is $22,500 for 2023 if you are under 50 years old. If you are over age 50, you can contribute an extra $7,500.

Often your employer will also contribute to your retirement account. Usually, this is formatted to match your percentage contribution up to a certain threshold.

For example, they might match your contribution up to 6% of your income. If you contribute 4%, then the company will contribute 4%. If you contribute 10%, the company will contribute 6% (because of the pre-determined cap). Trying to match at least what the company offers is a great starting point because it’s essentially free money!

The next step with your new retirement plan is choosing the investment options. Most of these plans will offer a pre-determined list of investment funds that you can choose from. If no selection is made, it usually defaults to a target date fund.

The nice part about a company-sponsored retirement plan is that the contributions are automatically invested once they are deposited into the account.

The new employer will usually require a waiting period to participate in the company plan—typically six months. So you should have time to digest some of this information before taking action.

Former Company Retirement Plans

You likely had a company-sponsored retirement plan with your previous employer that you’ll need to address. But don’t worry, you have options!

  • Keep it at the current custodian. You usually don’t have to do anything with the account if you don’t want to. Just make sure you are familiar with the fees that the current custodian is charging and how the account is invested. Transfer it to your new company-sponsored retirement plan.

  • This is assuming the new plan will allow incoming rollovers. This option is great for consolidation, but you’ll want to ensure the new plan has solid investment options.

  • Roll it over to an IRA. This option gives you much more control over your investments. However, you may not want to choose this option if you are in a certain income bracket because it may hinder your ability to make backdoor Roth IRA contributions.

Each of these decisions has pros and cons, so weighing those before you decide is important.


This is not an exhaustive list of what you must do or consider regarding your retirement plan. Each company’s plan will differ from others. It’s important to talk with a financial advisor to help advise what the best option is, how much to contribute, and what investments you should use.

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The material has been gathered from sources believed to be reliable, however Bedel Financial Consulting, Inc. cannot guarantee the accuracy or completeness of such information, and certain information presented here may have been condensed or summarized from its original source. To determine which investments or planning strategies may be appropriate for you, consult your financial advisor or other industry professional prior to investing or implementing a planning strategy. This article is not intended to provide investment, tax or legal advice, and nothing contained in these materials should be taken as such. Investment Advisory services are offered through Bedel Financial Consulting, Inc. Advisory services are only offered where Bedel Financial Consulting, Inc. and its representatives are properly licensed or exempt from licensure. No advice may be rendered unless a client agreement is in place.

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