---
title: "What happens to your 401(k) when you change jobs or the plan terminates? Answer in under 100 words. Cite only eCFR (www.ecfr.gov) sources."
canonical: https://www.m-i-n-d.ai/minds/retirement/401k-when-you-change-jobs-or-plan-terminates
jurisdiction: "US Federal"
last_verified: 2026-08-26
license: CC BY 4.0 — https://creativecommons.org/licenses/by/4.0/
attribution: "Source: MIND (m-i-n-d.ai)"
---

# What happens to your 401(k) when you change jobs or the plan terminates? Answer in under 100 words. Cite only eCFR (www.ecfr.gov) sources.

For tax year 2026 rules under current regulations, a job change lets you take a distribution of your 401(k) balance that is generally an eligible rollover distribution, which you can roll over tax-free into an IRA or another eligible retirement plan (a qualified plan, 403(a)/403(b) plan, or eligible 457(b) plan). If the plan terminates, amounts paid under an annuity contract bought and distributed by the plan are still eligible rollover distributions if they otherwise qualify. Severance also converts any unpaid plan loan into a plan loan offset amount that remains rollable.

## Details / How it works

Unless specifically excluded, **any distribution to an employee of all or any portion of the balance** in a qualified plan is an eligible rollover distribution, regardless of whether the benefit includes protections under section 411(d)(6). You may roll it over to an eligible retirement plan — an IRA described in section 408(a) or 408(b), another qualified plan, a 403(a)/403(b) annuity plan, or an eligible section 457(b) deferred compensation plan that separately accounts for the funds. When a plan terminates, an annuity contract may be distributed to the participant; payments under such a *qualified plan distributed annuity contract* are treated as payments of the balance to the employee's credit and are eligible rollover distributions if they otherwise qualify — even if distributed in connection with the termination.

## Numbers & thresholds

| Rollover event | Deadline |
|---|---|
| Standard indirect rollover | Within the **60-day period** of section 402(c)(3)(A) |
| **Qualified plan loan offset amount** (offset due solely to plan termination or failure to meet repayment terms because of severance from employment, where the loan met §72(p)(2) immediately before) | Through the individual's **tax filing due date (including extensions)** for the year of the offset, under section 402(c)(3)(C) |
| Non-qualified plan loan offset amount | Only within the **60-day period** of section 402(c)(3)(A) |

## Exceptions & edge cases

- **Not rollable:** required minimum distributions under section 401(a)(9); hardship distributions; substantially equal periodic payments over life/life expectancy or 10+ years; loans deemed distributed under §72(p); corrective distributions of excess deferrals/contributions; dividends on employer securities under §404(k); life-insurance costs includible under §72(m)(3)(B); deemed distributions under §409(p); permissible withdrawals from eligible automatic contribution arrangements (§414(w)); collectible purchases (§408(m)).
- **Basis (after-tax) portions** may go to an IRA, may reach a qualified trust only by direct trustee-to-trustee transfer, and may **not** be rolled into a §457(b) plan.
- **Non-spouse beneficiaries** cannot roll over a plan distribution; a designated beneficiary may instead use a direct trustee-to-trustee transfer to an inherited IRA under §402(c)(11).
- Surviving spouses (and alternate payees under a QDRO) are taxed as if they were the employee and may roll over.

## Sources

- [1] U.S. National Archives, Electronic Code of Federal Regulations — 26 CFR 1.402(c)-2 - Eligible rollover distributions · https://www.ecfr.gov/current/title-26/section-1.402(c)-2 · as of 2026-08-26