38-Year-Old Asks Suze Orman Where To Move His Roth 401(k) — She Says Avoid This One Option

Knowing what to do with a 401(k) after leaving a job can feel overwhelming — especially for younger workers planning long-term. That's why a listener named Robert reached out to Suze Orman's "Women & Money" podcast for guidance on what to do with his Roth 401(k) if he ever leaves his company.

Robert, 38, said he's been with his employer for 12 years and doesn't plan to leave anytime soon. Still, he wondered if he ever leaves his job, should he eventually roll his money into a Roth IRA, move it into a new employer's Roth 401(k), or just leave it where it is?

Here's what Orman had to say — and the one move she advised him to avoid.

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Suze Orman: Skip the Roth 401(k) at Your New Job

Orman didn't offer a one-size-fits-all answer but made it clear that one option was off the table. 

"Should you roll the money into a Roth 401(k) at a new company? No," she said. Instead, she encouraged Robert to either leave the money in his current Roth 401(k) or roll it into a Roth IRA, depending on what he feels most comfortable with at the time.

Her reasoning? Over time, Robert could accumulate a large balance in his 401(k), possibly a million dollars or more. Liquidating and transferring that amount later might feel daunting, especially if he's unfamiliar with investment options in the new plan.

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Comparing the Options: Stay Put or Roll Over?

If Robert leaves his job, he'll typically have four options: cash out, leave the money in his old plan, roll it into a Roth IRA, or roll it into a new employer's Roth 401(k). Orman ruled out that last option, so let's look closer at the two she suggested.

Leaving the Money in Your Roth 401(k)

If the current 401(k) plan offers low-cost investment options and solid performance, leaving the funds where they are could make sense. In her blog, Orman mentions that larger companies often negotiate lower fees — sometimes under 0.20% in expense ratios — which can help preserve returns over time.

The downside? You'll have to manage multiple accounts if you switch employers later. That can make retirement planning more complex down the road.

Rolling Into a Roth IRA

The other path Orman supports is rolling the funds into a Roth IRA. This option can give you greater control over your investments and simplify your portfolio if you're managing several old accounts. 

But beware: as a Pew Research study highlights, some IRA versions of the same funds found in a 401(k) can carry higher fees, which can cost investors thousands over time if not carefully managed.

To keep costs low, Orman recommends using discount brokerages and investing in low-cost index funds or ETFs.

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What to Watch Out For

While rolling over your 401(k) can streamline your retirement accounts, there are some pitfalls to avoid:

• Indirect Rollovers: These involve receiving a check and reinvesting the money yourself within 60 days. If you miss the deadline, you may face taxes and penalties.
• Higher Fees: Not all IRAs are created equal. Make sure to research expense ratios and investment options before making a move.
• Losing Employer-Only Investment Options: Some 401(k) plans include investment choices you won't find in an IRA or new employer's plan.

The Bottom Line

For Robert — and anyone considering what to do with their Roth 401(k) — the best choice depends on comfort level, investment familiarity, and fees. Orman's guidance is clear: Avoid rolling it into a new employer's plan. Instead, evaluate whether to keep it where it is or roll it into a low-cost Roth IRA that gives you more control and flexibility.

As always, it pays to compare your options carefully before making a decision.

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