Why would you not want to rollover a previous employer's 401(k) when changing jobs?
"The biggest reason why one might want to leave 401k money invested in an ex-employer's plan is that the plan offers some superior investment opportunities that are not available elsewhere, e.g. some mutual funds that are not open to individual investors such as S&P index funds for institutional investors (these have expense ratios even smaller than the already low expense ratios of good S&P index funds) or ""hot"" funds that are (usually temporarily) closed to new investors, etc. The biggest reason to roll over 401k money from an ex-employer's plan to the 401k plan of a new employer is essentially the same: the new employer's plan offers superior investment opportunities that are not available elsewhere. Of course, the new employer's  401k plan must accept such roll overs. I do not believe that it is a requirement that a 401k plan must accept rollovers, but rather an option that a plan can be set up to allow  for or not.  Another reason to roll over 401k money from one plan to another  (rather than into an IRA) is to keep it safe from creditors. If you are  sued and found liable for damages in a court proceeding, the plaintiff can come after IRA assets but not after 401k money.  Also, you can take a loan from the 401k money (subject to various rules about how much can be borrowed, payment requirements etc) which you cannot from an IRA. That being said, the benefits of keeping 401k money as 401k money must be weighed against the usually higher administrative costs and usually poorer and more limited choices of investment opportunities  available in most 401k plans as Muro has said already." I've changed jobs several times and I chose to rollover my 401k from the previous employer into an IRA instead of the new employer's 401k plan.  The biggest reason not to rollover the 401k into the new employer's 401k plan was due to the limited investments offered by 401k plans.  I found it better to roll the 401k into an IRA where I can invest in any stock or fund. Another minor reason not to rollover would be to avoid the pro-rata taxes when doing a backdoor Roth IRA contribution.
Does your current employer offer a 401(k)? Can you roll your IRA into that? You can borrow from a 401(k). If you leave your job, get fired etc., you have to pay back the loan but you can avoid the early withdrawal penalty at least; there may also be  less of a tax issue since it is a loan and may not be considered income unless you don't pay it back. The terms for  taking a loan are set by the 401(k) plan  documents. If you explore this route make sure you see the plan document itself. Don't rely on what someone tells you. "The IRS has a FAQ page about Hardship Distributions from a 401(k). The IRS defines a hardship in this case as ""an immediate and heavy financial need of the employee and the amount must be necessary to satisfy the financial need.""  Included in the list of examples is ""certain expenses for the repair of damage to the employee's principal residence.""  However, whether your former employer allows this particular reason is up to their plan documents.  It sounds like, from what you described on the website, that your plan does include this reason as a possibility for you. Next, you need to decide if the projects you have in mind qualify as ""repair of damage.""  This uses the same rules as the deductible casualty rules found in IRS Publication 547, which defines a casualty this way: A casualty is the damage, destruction, or loss of property resulting from an identifiable event that is sudden, unexpected, or unusual. A sudden event is one that is swift, not gradual or progressive. An unexpected event is one that is ordinarily unanticipated and unintended. An unusual event is one that is not a day-to-day occurrence and that is not typical of the activity in which you were engaged. Examples are given in Pub 547.  If the projects you have in mind are necessary due to an event (like a flood or a fire), it might be allowed.  But most ""home improvement"" projects would not qualify for this. If you'd like a way to simplify your financial profile, an option for you, since you no longer work at this employer, is to roll over this 401(k) into a Rollover (traditional) IRA.  This way, you won't have to deal with your former employer anymore.  You could pick an IRA custodian that you already have another account with, if you like, and reduce the number of statements that you get.  But the IRA will not let you take money out without penalty for home improvement projects, either." The 401(k) contribution is Federal tax free, when you make the contribution, and most likely State too.  I believe that is true for California, specifically. There was a court case some years ago about people making 401(k) or IRA contributions in New York, avoiding the New York state income tax.  Then they moved to Florida (no income tax), and took the money out.  New York sued, saying they had to pay the New York income tax that had been deferred, but the court said no.  So you should be able to avoid California state income tax, and then later if you were to move to, for example, Texas (no income tax), have no state income tax liability. At the Federal level, you will have different problems.  You won't have the money; it will be held by the 401(k) trustee.  When you try to access the money (cash the account out), you will have to pay the deferred taxes.  Effectively, when you remove the money it becomes income in the year it is removed. You can take the money out at any time, but if you are less than 59 1/2 at the time that you take it, there is a 10% penalty.  The agreement is that the Feds let you defer paying the tax because it is going to finance your retirement, and they will tax it later.  If you take it out before 59 1/2, they figure you are not retired yet, and are breaking your part of the agreement. Of course you can generally leave the money in the 401(k) plan with your old employer and let it grow until you are 59.5, or roll it over into another 401(k) with a new employer (if they let you), or into an IRA.  But if you have returned to your own country, having an account in the U.S. would introduce both investment risk and currency risk. If you are in another country when you want the money, the question would be where your U.S. residence would be.  If you live in California, then go to, say France, your U.S. residence would still be California, and you would still owe California income tax.  If you move from California to Texas and then to France, your U.S. residence would be Texas.   This is pretty vague, as you might have heard in the Rahm Emanual case -- was he a resident of Chicago or Washington, D.C.?  Same problem with Howard Hughes who was born in Texas, but then spent most his life in California, then to Nevada, then to Nicaragua, and the Bahamas.  When he died Texas, California and Nevada all claimed him as a resident, for estate taxes.  The important thing is to be able to make a reasonable case that you are a resident of where ever you want to be -- driver's license, mailing address, living quarters, and so on. HSA's are one of the few accounts where the money is both tax free going in and coming out. For long term savings, the only account that might beat that is a 401(k) with an employer match. Unlike an FSA, the money can stay in the account indefinitely. You can also use the money to pay medical insurance premiums once you separate from the employer. An HSA combines the best features of a FSA, Roth account, and IRA/401(k) account. As such I think there is rarely a reason not to max one out, and in fact I think it is worth it to go out of your way to get access to one. There are some drawbacks, of course. If you don't use the money for medical expenses, it may be taxed and perhaps penalized. Getting access to one can be tricky (you have to be covered by an HDHP, but not by a non-HDHP, nor by an FSA). The low contribution limits make it hard to build up a large balance. Many providers charge a monthly fee of $1 to $4 if you want to invest the balance (small, but it adds up, especially given the low balance per previous sentence). Don’t take the cash deposit whatever you do. This is a retirement savings vehicle after all and you want to keep this money designated as such.   You have 3 options:  1) Rollover the old 401k to the new 401k. Once Your new plan is setup you can call who ever runs that plan and ask them how to get started. It will require you filling out a form with the old 401k provider and they’ll transfer the balance of your account directly to the new 401k.  2) Rollover the old 401k to a Traditional IRA. This involves opening a new traditional IRA if you don’t already have one (I assume you don’t). Vanguard is a reddit favorite and I can vouch for them as Well. Other shops like Fidelity and Schwab are also good but since Vanguard is very low cost and has great service it’s usually a good choice especially for beginners.  3) Convert the old 401k to a ROTH IRA. This is essentially the same as Step 2, the difference is you’ll owe taxes on the balance you convert. Why would you voluntarily want to pay taxes f you can avoid them with options 1 or 2? The beauty of the ROTH is you only pay taxes on the money you contribute to the ROTH, then it grows tax free and when you’re retired you get to withdraw it tax free as well. (The money contained in a 401k or a traditional IRA is taxed when you withdraw in retirement).   My $.02. 401k accounts typically have higher fees than IRAs, even if they own the same mutual funds the expense ratios are usually more in the 401k. The last 2 times I’ve changed jobs I’ve converted the 401k money into my ROTH IRA. If it’s a small sum of money and/or you can afford to pay the taxes on the money I’d suggest doing the same.  You can read up heavily on the pros/cons of  ROTH vs Traditional but My personal strategy is to have 2 “buckets” or money when I retire (some in ROTH and some in Traditional). I can withdraw as much money from the Traditional account until I Max out the lowest Tax bracket and then pull any other money I need from the ROTH accounts that are tax free.This allows you to keep taxes fairly low in retirement.  If you don’t have a ROTH now this is a great way to start one. If your employer does not offer contribution matching, and you don't like the range of investment options provided by the company 401k, then you probably are better off investing in your own IRA instead.  In an IRA held at a bank or brokerage, you can invest in multiple stocks or funds and move money around within the IRA pretty freely in most cases. If your company is doing well and is actually sharing profit into the 401k, you might consider leaving your 5% contribution to the 401k where it is and put the other 5% you are planning to contribute into a new IRA of your own.  This straddles the risk of you losing money if your company 401k tanks (or profit sharing dries up) and your missing out on profit sharing if it continues to pay well. "Yes. Two years after your first contribution to the SIMPLE IRA, you can roll it to a traditional IRA.  You can still contribute ""pre-tax"", but the mechanism will be slightly different, since with an employer plan the contribution was automatically deducted from your paycheck.  With an individual plan, you make the contributions yourself and then get a tax deduction when you file.  Since contributions to traditional and Roth IRAs combined are capped at $5,500 if you're under 50, some sort of employer-sponsored plan might be better from a contribution standpoint. If your institution offers some sort of plan other than a 401(k), you might still want to roll to a traditional IRA, since you will have much more flexibility in the investments you choose. On the flip side, if that thought is overwhelming, having a smaller set of options might be better for your peace of mind." They believe that it reduces the risk that Revenue Canada will deem you to be an employee and make them pay a whole pile of tax, EI, CPP and so on that should have been paid if you had been hired as an employee. It's my recollection that the employer gets dinged for both the employee and employer share of those withholdings (and generally the employer's share is larger than yours) so they really want to prevent it. There's a Revenue Canada publication about whether you're an employee or not. There's nothing on it about being incorporated, but still employers feel more protected when their contracts are incorporated.  We did work as a sole proprietorship at the very beginning, so that we could deduct our losses against employment income earned earlier in the year, before we started the business. You can find clients who will take you on. We incorporated once the losses were over with (basically we had bought the equipment and office supplies we needed to get started.) It's a simple and relatively inexpensive thing to do, and gives clients a sense of protection. It won't protect you from your own poor decisions since you'll be a director of the firm.