Broker Check

Changing jobs and taking your 401K

Congratulations on your new job! In many companies, employees are offered bonuses, health benefits, and other perks in addition to base salary. Be sure to ask how these are awarded and what the tax implications are that you should plan for. In addition, be sure to understand your company’s other compensation programs:

  • Employer Sponsored (401K) savings program – this is a great way to save pre-tax money – and better yet – many companies match what you contribute.
    • Leave the money in his/her former employer’s plan, if permitted;
    • Roll over the assets to his/her new employer’s plan, if one is available and rollovers are permitted;
    • Roll over to an IRA; or
    • Cash out the account value

  • Employee Stock Purchase Program – or ESPP. This is a way to purchase shares of your company stock at a rate that is fixed for a certain period of time. Think of it as setting aside money to purchase company shares at a fixed price for several years.
  • Stock options – some companies make stock options available to employees as a way to attract and retain talent. Stock options can vary with each company – but in general, stock options are essentially options to buy a certain number of shares at a set price that vest over a set period of time. Questions you should be sure to ask: How many shares? What is the “strike” price (the price that you will pay to purchase your options)? What is the vesting schedule? What kind of stock options — incentive, nonqualified, or a combination of both?

Contact the Granite team to discover take your 401K with you: Contact the Granite team.

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