Investing · Module 8 of 11
Moving it and naming it
What happens to your retirement account when you change jobs, and accounts meant for one specific purpose.
Key terms in Moving it and naming it
- Rollover
A rollover is a transfer of money from one retirement plan or IRA into another. A direct rollover moves the funds between institutions without the owner touching them, while a 60-day rollover gives the owner a distribution to redeposit in time. A properly completed rollover generally avoids immediate tax, and the savings stay tax-deferred.
Source: Internal Revenue Service, Rollovers of retirement plan and IRA distributions
- Vesting
Vesting is the process by which an employee gains full ownership of the money an employer has contributed to a retirement account. The share owned grows according to a schedule, and at one hundred percent the employer cannot take it back. An employee's own contributions are always fully vested, while some plan types require employer money to vest immediately.
Source: Internal Revenue Service, Retirement topics - Vesting
- Forfeiture
A forfeiture is the part of employer contributions that a worker loses by leaving a job before those contributions have vested. The unvested amount stays with the plan instead of going to the departing employee. How much is forfeited depends on the plan's vesting schedule and the worker's years of service.
Source: Internal Revenue Service, Retirement plans definitions
Every term on Lever is in the money glossary.
About this module
Moving it and naming it is part of Investing, one of 15 subjects in Lever. It’s a short run of 5 lessons, about 13 minutes in all, so you can finish it in one sitting.
Every lesson takes one idea at a time. You read it with the math worked out step by step, answer a question that puts it to use, then see why the right answer is right and why the others aren’t.
It’s for anyone who was never taught this, and you don’t need to know anything first. Every lesson is free. Lever works out what you already know, so you can start here or let your path bring you to it.
More in Investing
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1
Why money cannot sit still
Why cash slowly loses value, what it means to put money to work, and which money shouldn’t be invested at all.
7 lessons -
2
What risk actually is
What risk really means, why higher returns come with bigger swings, and how much ups and downs you can live with.
9 lessons -
3
What you can actually own
Stocks, bonds, funds and index funds explained, plus the yearly fee that never sends you a bill.
10 lessons -
4
Actually starting
Open the account, start small, invest a set amount on a schedule, and keep an eye on fees.
7 lessons -
5
The days you cannot pick
Why staying invested usually beats trying to time the market, and why the latest news is a poor guide.
5 lessons -
6
The account with a tax break
Retirement accounts with tax breaks, free money from an employer match, and paying tax now or later.
5 lessons -
7
Limits, locks and deadlines
How much you can put into tax-advantaged accounts, the cost of taking money out early, and the deadlines to know.
6 lessons -
9
Spending what you saved
How much you can take out each year in retirement without running out, and why the order of good and bad years matters.
5 lessons -
10
The mix that shifts
Choosing your mix of investments, rebalancing when it drifts, and all-in-one funds that do it for you.
7 lessons -
11
Choosing where it goes
Which account to fill first, which investments to keep where, and how to do it all if you work for yourself.
6 lessons
Try this module
It’s part of Investing. Lever will bring it to you when you’re ready, or you can go straight there.