Amid a recessionary economic climate and layoffs in Big Tech, employees who find themselves kicked to the curb have some choices to make when it comes to their retirement benefits from tech titans such as Microsoft, Google, Twitter, Dell, Amazon and Meta.
Since the start of the year, Microsoft has unveiled plans to unload 10,000 workers and Google parent Alphabet will fire 12,000 employees. Other tech giants, including Twitter , Amazon, Meta Platforms (formerly Facebook), Dell and Intel also have disclosed job cuts.
Their workers, meanwhile, will need to grapple with a few questions when it comes to their 401(k) savings: Is it best to keep their retirement money in the company plan, roll over those dollars to a new employer plan or into an individual IRA?
Aaren Strand, Bellevue, Wash.-based lead adviser at Avier Wealth Advisors, an independent advisory firm with $650 million in assets under management that works with individuals in the tech industry, said a plus for many of these workers that will help keep them from having to withdraw their savings, and potentially face a tax penalty, is that the severance terms are decent.
"Hopefully that will allow retirement accounts to stay invested and positioned for the long term," she said.
Ms. Strand added that so far, all the individuals she works with are still employed. "Most are nervous about the changing environment but we have spent time working on basic financial planning principles, things like adequate cash reserves and minimal debt," she said. "In the event of a layoff, most will have adequate resources to ride out the storm."
So, what happens to retirement assets once tech workers are terminated?
Microsoft's company match is fully vested from day one, Ms. Strand said.
"The good news is that the dollars in your 401(k) are yours to keep," she said. "Individuals can leave funds in their 401(k) or they can roll them into an IRA."