Can You Contribute to 401k After Leaving Job

If you leave your job, you may still be able to contribute to your 401(k) plan. There are two main ways to do this: through a rollover or a direct contribution. A rollover involves moving money from your old 401(k) plan into a new one. You can do this by contacting your new plan provider and requesting a rollover form. A direct contribution involves contributing money directly to your old 401(k) plan. You can do this by contacting your old plan provider and asking for the necessary forms. However, there are some important things to keep in mind if you want to contribute to your 401(k) after leaving your job. First, you must have left your job with a vested balance in your 401(k) plan. This means that you have ownership of the money in your plan, even if you have not yet reached retirement age. Second, you must be eligible to make catch-up contributions. Catch-up contributions are additional contributions that people aged 50 and older can make to their 401(k) plans. Finally, you must make your contributions by the tax deadline for the year in which you left your job.

Rollover Options for Former Employees

When you leave your job, you have several options for your 401(k) account:

  • Leave it in the plan: You can leave your money in your former employer’s plan if it allows. However, you may have limited investment options and higher fees.
  • Roll it over to an IRA: You can roll over your 401(k) assets into an individual retirement account (IRA). This gives you more investment options and potentially lower fees.
  • Roll it over to a new 401(k) plan: If you start a new job that offers a 401(k) plan, you can roll over your old 401(k) into the new one. This allows you to continue saving for retirement in a tax-advantaged account.

    If you choose to roll over your 401(k), you can do so in two ways:

    • Direct rollover: This is the simplest and most common way to roll over your 401(k). The money is transferred directly from your old 401(k) plan to your new account.
    • Indirect rollover: With an indirect rollover, you receive a check from your old 401(k) plan and then deposit it into your new account. You have 60 days to complete an indirect rollover, or the money will be subject to income taxes and penalties.

      The following table summarizes the key differences between the three rollover options:

      OptionInvestment OptionsFeesTax Implications
      Leave it in the planLimitedMay be higherNo immediate tax implications
      Roll it over to an IRAMorePotentially lowerNo immediate tax implications
      Roll it over to a new 401(k) planVariesVariesNo immediate tax implications

      Employer Plan Rules and Restrictions

      The rules and restrictions regarding 401(k) contributions after leaving a job can vary significantly depending on the specific plan and employer. Here are some common rules and restrictions:

      Plan Eligibility

      • Some 401(k) plans allow participants to continue making contributions even after leaving their employment for a period of time, while others do not.
      • Eligibility requirements may include factors such as age, length of service, or vested account balance.

      Contribution Limits

      • If you’re eligible to continue contributing, the IRS annual contribution limits still apply, which are $22,500 ($30,000 for those age 50 and older).
      • The plan may also have its own contribution limits or restrictions.


      • Vesting refers to the percentage of your 401(k) balance that you own.
      • If you’re not fully vested in your account, you may only be able to withdraw your employee contributions if you leave your job.
      • Vesting schedules vary by plan, but many plans follow a cliff vesting schedule or a graduated vesting schedule.
      • Employer Matching Contributions

        • Employer matching contributions are typically only available while you’re actively employed.
        • Once you leave your job, you will no longer receive matching contributions.
        ExampleEligibilityContribution LimitsVesting
        Plan AEligible for 1 year$22,500Graduated vesting over 5 years
        Plan BNot eligibleN/AN/A
        Plan CEligible until age 59.5$30,000Cliff vesting at 5 years

        It’s important to check with your plan administrator or employer to determine the specific rules and restrictions for your 401(k) plan after leaving your job.

        Tax Implications of Post-Employment Contributions

        There are tax implications to consider when making post-employment contributions to a 401(k) plan. These implications vary depending on whether the contributions are made on a pre-tax or post-tax basis.

        Pre-Tax Contributions

        • Contributions made on a pre-tax basis are deducted from your paycheck before taxes are taken out.
        • These contributions are not subject to income tax in the year they are made.
        • However, they will be subject to income tax when you withdraw the money from the account.

        Post-Tax Contributions

        • Contributions made on a post-tax basis are made after taxes have been taken out of your paycheck.
        • These contributions are not deductible from your income for tax purposes.
        • However, withdrawals from the account are tax-free.

        The following table summarizes the tax implications of pre-tax and post-tax 401(k) contributions:

        Contribution TypeTax Treatment of ContributionsTax Treatment of Withdrawals
        Pre-TaxDeductible from incomeTaxable when withdrawn
        Post-TaxNot deductible from incomeTax-free when withdrawn

        Contribution Limits

        * **Before-tax contributions:** Up to $22,500 in 2023 (or $30,000 for those age 50 and older)
        * **Roth contributions:** Up to $7,500 in 2023 (*if your modified adjusted gross income is within the limits)
        * **Limits increase annually:** Determined by the cost-of-living adjustments.

        Catch-Up Provisions

        * **Age 50 or older:** Can contribute an additional $7,500 in 2023 to both traditional and Roth 401(k)s
        Alright folks, there you have it. The inside scoop on whether you can keep contributing to your 401k after leaving your job. I hope this article was helpful and informative. If you have any other questions about 401ks or other retirement accounts, feel free to stop by again. I’m always happy to chat about all things money. Thanks for reading!