Portable Benefits

When computers took up entire warehouses, many people thought there was no way your average consumer would have a computer in their house. Now we have them in our pockets. The future is all about portability, baby.

Portable benefits are the same idea: employee-sponsored benefits that you can take with you. When you leave your job, you should be able to transfer things like your 401(k) either to yourself (IRA) or to a new 401(k) with your new employer via a rollover.

For the boomer generation who stayed at the same company for 50 years, portable benefits weren’t thought about too much. Today, they’re a basic feature, making changing jobs a lot less worrisome. Still, be on the lookout, since you might lose a good chunk of money in a rollover process.

Portable benefits apply to most 401(k) plans, 403(b) plans, and health savings accounts (HSAs). The Health Insurance Portability and Accountability Act (HIPAA) makes individual healthcare plans portable, and has done so since 1996. Other types of plans, like defined-benefit plans and flexible spending accounts (FHAs), won’t fit so easily in your pocket, since they’re not portable. Bigger isn’t always better.