The news that Goodyear's Fayetteville plant will close by the end of 2027 affects 1,700 workers and their families. If you're among those impacted, one of your most pressing questions is what happens to your 401(k). You'll need to move your money somewhere, but you get to decide where. Here's what you need to know about your options.
Your Money Stays Put Until You Act
When Goodyear closes the plant, they'll eventually terminate the 401(k) plan. You'll receive advance notice and information about your deadline to make a decision. Until then, your account remains invested where it is. You’ll have three main choices for your retirement savings:
Roll It Over to an IRA
An IRA (Individual Retirement Account) is a retirement account that you own independently of any employer. Many people leaving a job choose this option because it provides control and flexibility. You open an IRA with a financial institution, then request a direct rollover from your Goodyear 401(k). When structured as a direct rollover, this transfer happens without triggering taxes or penalties.
An IRA typically offers broader investment choices than employer-sponsored plans. If you have retirement accounts from previous employers, you can consolidate them into a single IRA, simplifying your financial management. The responsibility for choosing investments and monitoring fees falls to you or your financial advisor.
Roll It Into a New Employer's 401(k)
If your next employer offers a 401(k) plan that accepts incoming rollovers, you can transfer your Goodyear account directly into that plan. Not all employers permit this, so check with your new HR department. This option keeps your retirement savings in one employer-sponsored account, which some people find easier to manage than maintaining a separate IRA.
Withdraw the Money
You can take a full distribution of your account balance. This is rarely advisable from a financial planning perspective. Withdrawals are subject to ordinary income tax, and if you're under the age of 59½, you'll also face a 10% early withdrawal penalty. A $50,000 account could be reduced to roughly $30,000 after federal and state taxes plus penalties. Unless you're facing a genuine financial emergency with no other options, preserving your retirement savings is the better path.
What Happens If You Don't Take Action
If you don't move your money by Goodyear's deadline, the plan administrator will typically roll your account into an IRA they select. You retain ownership of the funds, but you won't have chosen the institution or investment options. Making an active decision puts you in control of these choices.
Direct Rollovers and Tax Implications
The cleanest way to move your 401(k) is through a direct rollover, where funds transfer directly from your Goodyear account to your new retirement account. You don't receive a check or access the money during the transfer. If you opt for an indirect rollover where Goodyear issues a check to you, they're required to withhold 20% for federal taxes. You then have 60 days to deposit the full amount (including the withheld portion) into another qualified retirement account to avoid taxes and potential penalties.
For North Carolina residents, properly executed rollovers between qualified retirement accounts don't trigger state income tax. The state's 3.99% income tax applies only to distributions you receive as taxable income.
Questions to Consider
Before deciding what to do with you 401(k), think through a few questions.
- How many years until you plan to retire?
- Have you secured new employment with a 401(k) plan?
- Are you comfortable managing investment decisions, or would you prefer the structure of an employer plan?
- Do you have other retirement accounts that could benefit from consolidation?
Your 401(k) may represent one of your largest assets. The choice you make affects your long-term financial security.
Getting Professional Guidance from a Financial Advisor
Navigating retirement account decisions during a job transition can feel overwhelming. If you're a Goodyear employee in Fayetteville trying to determine the best path for your 401(k), Good Life Financial Advisors can help. We work with individuals facing employment changes to explain options clearly, compare costs and features, and develop a strategy that aligns with your retirement goals.
Contact us for a complimentary consultation: (910) 692-9014.
Good Life Financial Advisors of NC serves individuals and families in Fayetteville, Southern Pines, and throughout North Carolina. We provide guidance on retirement planning during career transitions and life changes.
Photo Credit: Paul Woolverton / CityView