Taxes
The Worst 401(k) Mistake You Can Make When You Switch Jobs
Employees face a large penalty from the IRS if they don’t take swift action after getting their retirement plan cashed out.
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Workers in the U.S. who are increasingly job-hopping these days risk making one of the biggest financial mistakes out there.
Their former employers are allowed to dissolve their 401(k)s if the balance is low enough, and send cash either directly back to the workers or roll the money into an IRA that likely has relatively high fees.