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What to do with your 401(k) after a layoff

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9 months ago

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For workers who suddenly find themselves without a paycheck, tackling to-dos related to a 401(k) left behind may not be top of mind.

“Most people are really thinking, ‘How am I going to survive and can I get unemployment?'” said certified financial planner Lazetta Rainey Braxton, founder and managing principal of virtual firm The Real Wealth Coterie. She is a member of CNBC’s Financial Advisor Council.

“There are areas of employee benefits they need to consider,” she said, such as health insurance coverage and loss of disability insurance.

“Usually [dealing with] their 401(k) is not urgent,” Braxton said. “Just don’t forget about what is one of your biggest assets.”

Here’s what to know.

First, how to handle that 401(k) loan

Among 401(k) plans that allow participants to borrow money against their account, roughly 13% of workers had an outstanding loan in 2024, according to Vanguard’s How America Saves 2025. The average balance owed was $11,000. Those numbers have changed little over the last five years.

If you have a loan against your 401(k) account when you leave a company, how it’s handled depends on the specifics of the plan. For example, 44% let you continue repayment on the loan, the Vanguard research shows.

Another possibility: If you get a new job, you may be able to roll over the loan, along with the assets in your account, to the new company’s plan, said Will Hansen, executive director of the Plan Sponsor Council of America.

The share of companies that allow either the loan to leave the plan alongside assets or accept a rolled-over loan is 15%, according to new research from Hansen’s organization. It’s most common among employers with 5,000 or more employees, at 24.4%.

“More plans are allowing a rollover of a plan loan,” Hansen said. “If you get a new job, check with your employer to see if they accept an outstanding loan in a rollover.”

If your plan allows neither of those options, you may have to pay the loan back fairly quickly. Otherwise, the amount will be considered a distribution from your account — in which case you may owe income taxes on it, Braxton said. And if you are younger than age 59½, a 10% early-withdrawal tax penalty could apply, too.

If it is initially treated as a distribution, you get until tax day — typically April 15 — of the following year to put an equivalent amount into an individual retirement account or other qualified account to avoid the tax hit.

Decide what to do with your 401(k) balance

Aside from loan considerations, you’ll need to make decisions about what to do with your 401(k) savings. One option is to leave it in your former employer’s plan — most allow it.

However, if your balance is low enough, the plan may not let you stay. If your balance is below $1,000, your account may be liquidated and sent to you in check form, which would generally be subject to income taxes. And if you’re younger than 59½, you may owe the 10% early-withdrawal penalty.

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An exception to that is called the Rule of 55: If you leave your job in or after the year you turn 55, you can take penalty-free distributions from your 401(k).

Your ex-employer can also roll over balances below $7,000 to an IRA. If that happens, the money may not be invested how you’d prefer. A 2024 Vanguard study showed that 48% of investors with a rollover IRA thought the money was automatically invested, and 46% didn’t know their contributions were allocated to money market funds by default.

Of course, you also can actively move your 401(k) balance to another retirement account, which could include a 401(k) at another employer or an IRA. In either case, you may be able to find the same or similar investments that you’ve used in your 401(k), such as target-date funds or index funds, Braxton said.

The right choice for your money can depend on a host of factors, including available investment options and the fees charged. Additionally, consider any conflicts of interest on the part of financial professionals giving you advice on rollovers.

Be aware of moves that trigger a tax bill

Braxton added, however, that if you make any moves that could affect your tax situation — for example, rolling over 401(k) assets from a former employer to a Roth IRA — it’s important to get some professional guidance. While Roth assets grow tax-free and are tax-free upon withdrawal in retirement, contributions are made on an after-tax basis — unlike traditional 401(k) contributions. So if you convert pre-tax money to a Roth account, you will owe taxes on the amount.

If you have a Roth 401(k), it can only be rolled over to another Roth account, but that move would not trigger upfront tax consequences.

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Also, if you decide to move your retirement savings, experts recommend a trustee-to-trustee rollover, which sends the transfer directly to the new 401(k) plan or IRA custodian. Having a check issued to yourself creates potential risks — if there’s a mishap in depositing the funds into a qualified retirement account, it could be treated as a withdrawal and subject to taxes and penalties.

While you’re making decisions about a 401(k) with a former employer, keep in mind that while any money you put in your account is always yours, the same can’t be said about employer contributions.

Vesting schedules — the length of time you have to stay at a company for its matching contributions to be 100% yours — can be immediate or up to six years. Any unvested amounts generally are forfeited when you leave your company.

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$20,000 Caution Bond Requirement for US Visa Applications imposed on 50 Countries

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6 days ago

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August 8, 2026

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The United States Department of State has officially implemented a revised visa policy introducing a mandatory posting requirement for caution payments of up to $20,000 on select foreign travel applications. Under the updated regulatory framework, consular officials are authorized to require temporary nonimmigrant visa applicants from targeted foreign countries to post a refundable financial bond of $20,000 as a condition for visa issuance. The policy mechanism is designed to address diplomatic concerns regarding high overstay rates among temporary visitor, business, and educational visa categories.

The caution bond pilot program applies selectively to foreign nationals from designated countries whose diplomatic entities record historical visa overstay rates exceeding established federal thresholds. Under administrative guidelines published by the State Department, the full financial deposit is posted directly to a dedicated federal escrow account prior to final visa issuance. The entire caution payment is automatically refunded to the applicant upon verified proof of timely departure from the United States in strict compliance with the authorized duration of stay. Conversely, failure to depart within the legal timeframe results in full forfeiture of the posted financial bond to the United States government.

Diplomatic representatives and travel policy experts have expressed varying perspectives regarding the operational implementation of the caution bond system. Administration officials emphasize that the measure serves as an effective, market-based incentive to enforce international travel compliance and preserve domestic immigration security standards. However, international trade organizations and foreign diplomatic missions have raised concerns regarding the financial burden imposed on legitimate business travelers, foreign students, and commercial partners from developing nations.

The United States finalized the rule to make the temporary visa bond program permanent, taking effect on August 3, 2026. The updated permanent regulation replaces the prior 12-month pilot, eliminates the lowest $5,000 tier, and raises the maximum required bond amount to $20,000 for specific B-1/B-2 business and tourist visa applicants.

Here is the list of the 50 countries on the list as o August 3, 2026

African Nations (31 Countries)

  • Algeria
  • Angola
  • Benin
  • Botswana
  • Burundi
  • Cabo Verde (Cape Verde)
  • Central African Republic
  • Côte d’Ivoire (Ivory Coast)
  • Djibouti
  • Ethiopia
  • Gabon
  • The Gambia
  • Ghana
  • Guinea
  • Guinea-Bissau
  • Lesotho
  • Malawi
  • Mauritania
  • Mauritius
  • Mozambique
  • Namibia
  • Nigeria
  • São Tomé and Príncipe
  • Senegal
  • Seychelles
  • Tanzania
  • Togo
  • Tunisia
  • Uganda
  • Zambia
  • Zimbabwe

Asian & Eastern European Nations (11 Countries)

  • Bangladesh
  • Bhutan
  • Cambodia
  • Georgia
  • Kyrgyzstan
  • Mongolia
  • Nepal
  • Papua New Guinea
  • Tajikistan
  • Turkmenistan
  • Uzbekistan

Caribbean & Latin American Nations (5 Countries)

  • Antigua and Barbuda
  • Cuba
  • Dominica
  • Grenada
  • Venezuela

Oceanian Nations (3 Countries)

  • Fiji
  • Tonga
  • Vanuatu

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Next-Generation Retirement Planning: Managing Longevity Risk and Variable Income Streams

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1 week ago

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August 7, 2026

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Retirement planning strategies are evolving in 2026 to address increased life expectancies, shifting dynamic market conditions, and the transition away from traditional defined-benefit pensions. Individual investors and financial advisors are abandoning rigid retirement models in favor of flexible, multi-asset strategies designed to mitigate longevity risk and preserve purchasing power over multi-decade retirement horizons.

Mitigating Longevity Risk with Dynamic Asset Allocation
As average life expectancies extend past eighty-five years, one of the primary financial risks facing retirees is outliving their accumulated wealth. Traditional fixed income allocations—such as the standard 60/40 equity-to-bond portfolio—are being reevaluated to ensure portfolios generate sufficient capital growth alongside reliable income.

Financial planners recommend maintaining a meaningful equity allocation throughout retirement to offset long-term inflation erosion. High-dividend equity funds, global real estate investment trusts (REITs), and inflation-indexed Treasuries are combined to create diversified portfolios that deliver both growth and income stability.

The Transition to Dynamic Withdrawal Strategies
The classic “4% safe withdrawal rule” is increasingly replaced by dynamic withdrawal strategies that adapt annually based on market performance. Under a dynamic withdrawal framework, retirees adjust their annual distribution rates within pre-set caps and floors:
– Market Upside: During strong market returns, retirees can increase discretionary spending or fund family legacy gifts.
– Market Downturns: During market pullbacks, spending distributions are temporarily reduced to prevent sequence-of-returns risk and preserve core investment principal.

Guaranteed Lifetime Income Options and Deferred Annuities
To establish a guaranteed baseline for essential living expenses, individuals are incorporating modern fixed-indexed and deferred longevity annuities into their broader retirement architectures. Modern annuity structures offer competitive return caps, transparent fee schedules, and inflation-adjustment options.

By funding essential expenses—such as housing, healthcare, and insurance—with guaranteed income streams from Social Security, pensions, and annuities, retirees can manage discretionary investment portfolios with greater flexibility and lower emotional stress during market volatility.

Actionable Steps for Future Retirees
1. Calculate Baseline Retirement Expenses: Determine fixed living costs and map guaranteed income sources to cover essential expenditures.
2. Adopt Flexible Withdrawal Rules: Implement dynamic spending rules to protect investment principal against market downturns.
3. Incorporate Inflation-Protected Assets: Maintain exposure to dividend-growing equities and inflation-indexed bonds to safeguard long-term purchasing power.

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Building Generational Wealth: Family Governance, Estate Tax Optimization, and Asset Protection

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2 weeks ago

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August 1, 2026

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As the largest intergenerational transfer of wealth in history accelerates, high-net-worth families, entrepreneurs, and individual investors are placing heightened emphasis on comprehensive estate planning, family governance, and asset protection. Preserving capital across generations requires a balanced approach combining tax-efficient legal structures with open family communication and financial literacy education.

Optimizing Estate Tax Exemptions and Trust Structures
With potential modifications to federal estate tax exemption thresholds on the horizon, proactive estate planning is essential for high-net-worth households. Estate planning attorneys and wealth advisors are establishing multi-generational trust structures to transfer wealth efficiently while minimizing estate and gift tax exposure.

Popular structural strategies include:
– Irrevocable Life Insurance Trusts (ILITs): Utilizing life insurance proceeds to provide liquidity for estate tax obligations without expanding the taxable estate.
– Grantor Retained Annuity Trusts (GRATs): Transferring rapidly appreciating assets to beneficiaries with minimal gift tax consequences.
– Dynasty Trusts: Preserving wealth across multiple generations while providing long-term asset protection from creditor claims and legal liabilities.

Establishing Family Governance and Financial Education
Legal and financial structures alone cannot guarantee long-term wealth preservation without effective family governance. Financial advisors report that a significant percentage of multi-generational wealth dissipation stems from lack of communication and inadequate financial preparation among heir generations.

Families are establishing formal family governance frameworks, including periodic family meetings, written mission statements, and structured philanthropic foundations. Involving younger family members in charitable grant-making and investment discussions fosters financial stewardship and prepares heirs to manage family assets responsibly.

Digital Asset Custody and Legacy Planning
In today’s modern economy, estate planning must extend beyond physical real estate and traditional brokerage accounts to encompass digital assets. Comprehensive estate plans now include detailed inventories and legal access protocols for corporate domain names, intellectual property, digital media rights, and cryptocurrency holdings.

Fiduciaries and estate executors should be provided with secure, encrypted access mechanisms and clear legal authority to manage and transfer digital holdings in accordance with the owner’s estate directions.

Practical Steps for Legacy Planning
1. Review and Update Estate Documents: Ensure wills, revocable trusts, and power-of-attorney designations accurately reflect current family structures.
2. Establish Structured Trusts: Utilize irrevocable trusts to protect assets from creditors and minimize future estate tax liabilities.
3. Create a Digital Estate Inventory: Document access protocols and legal permissions for all online accounts, intellectual property, and digital assets.

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