Quiet Quitting, Lay-Offs, and Your 401k

2022 was an interesting year for workers.

In the first half of the year, the quiet quitting trend slowly heated to a summer boil, ultimately going viral and sweeping the nation. In the last few months, layoffs have spiked across many industries.

As many workers prepare to change jobs, the potential for accidentally abandoning their 401k plans increases. Abandoned 401k plans are a common problem that leads to millions in forgotten retirement funds for many Americans every year.

So, let’s talk quiet quitting, layoffs, and how to avoid letting these trends affect your retirement.

What is quiet quitting?

Kicked off by a viral TikTok video, quiet quitting is the trend of workers deciding to do only those tasks required by their job and nothing more. Typically, these workers feel undervalued, underpaid, and overworked.

Quiet quitters consider their actions a protest of employers who require above-and-beyond effort without above-and-beyond compensation—something many workers consider “free labor.”

Some employers understand their workers’ point of view; others view quiet quitting as “slacking off.” In many cases, there’s been a backlash against quiet quitters, introducing new tensions in the workplace.

Can you get fired for quiet quitting?

The answer entirely depends on your employer, your contract with them, and your current work habits. If you still follow protocol and remain productive, your job might be safe—with stress on “might.” In many cases, your employer can fire you if quiet quitting impacts your work, colleagues, and the business.

Simply put: if your employer wants to fire you, they can probably find a reason to.

Some employers have introduced what they call “quiet firing.” This seems to be a new name for an (unfortunately) old employer trick: when unable to fire an employee, they make work unbearable for that employee until they quit.

But, whether by choice or by force, some quiet quitters might find the need to change jobs in the future.

Mass layoffs in 2022 & 2023

2022 saw widespread layoffs and job cuts that impacted many industries. For an idea of the scale of these layoffs, this article lists just the tech companies with layoffs in 2022.

Some of those companies, such as Groupon and Robinhood, experienced mass layoffs.

A “mass layoff” is defined as laying off either:

  • 50 employees in less than 30 days (if that makes up 1/3 of the company’s total employees), or
  • 500 employees in less than 30 days (regardless of company size)

Big companies with mass layoffs in 2022 include:

  • Meta (11,000 employees)
  • Amazon (10,000 employees)
  • Twitter (3,700 employees)

And the list goes on. In November 2022 alone, US companies laid off over 75,000 employees. The trend is expected to continue to 2023

What does this mean for my 401k?

No matter the reason, changing jobs has become an all-too-common occurrence. We get a lot of these questions: “What happens to our old retirement plan when we find a new job?”

The good news is your 401 k plan doesn’t disappear when you leave your job. It’s still your money, and you’re legally entitled to it. Most often, your money will be in one of two places:

  • With your previous employer’s plan administrator
  • Mailed to you as a check

If your plan remains with your previous employer, it risks becoming forgotten and abandoned. Abandoned 401ks are a common problem: the U.S. Department of Labor estimates that each year, workers leave behind $155 billion in 401k funds (a rather shocking statistic).

A 401k rollover can help you avoid such an outcome.

Performing a 401 k rollover

Luckily, there’s a simple process to roll over your 401 k from your previous employer to your new employer. There are two methods of performing a rollover depending on what happens to your money when you leave your job.

Method 1: Direct rollovers

Direct rollovers are ones where your money goes directly from your old plan to your new one. You can contact your previous plan administrator, provide them with information about your new plan, and have them transfer it directly.

This is a helpful and simple method if your plan remains with your previous employer when you leave your job.

Sometimes, your previous plan administrator won’t be able to send it directly to your new one. Instead, they’ll liquidate your account and mail you a check for the full amount. In that case, you’ll have to use the second rollover method.

Method 2: Indirect rollovers

In an indirect rollover, you become the middleman. You receive a check for the full amount of your closed account. It becomes your responsibility to send the funds to your new plan.

To do so, we recommend contacting your new plan administrator and following their instructions for depositing the money into your account.

Do I have to pay taxes on a 401k rollover?

You won’t have to pay taxes if you perform a direct rollover. However, indirect rollovers do come with certain tax implications.

When you perform an indirect rollover, you receive the funds in your name once your previous account has been liquidated. The IRS gives you 60 days to roll that money over into a new retirement plan. It becomes taxable income if you fail to deposit the money into a retirement account during that 60-day period.

Also, if you only roll over a portion of the money into your new account, the portion you didn’t roll over becomes taxable income.

To avoid taxes on an indirect 401k rollover, the best practice is to roll over the entire balance before the end of the 60-day time limit—the sooner, the better.

Traditional vs. Roth 401k

There are two major types of 401k plans: Traditional and Roth. They both offer various investment options, the ability to build wealth over time, and both are available from most financial institutions that offer retirement plans. However, they come with a few big differences.

Some primary differences between a Traditional and Roth 401k are:


Contributions to a Traditional 401 k are pre-tax. This means that your contributions come directly from your pay before you pay taxes. This also means that, when you take any qualified distributions from your account, you must pay income tax on them.

Contributions to a Roth 401 k account are post-tax. This means that you contribute your money after paying income tax. The silver lining here is that qualified withdrawals aren’t taxable income.

Each option offers pros and cons. A tax advisor can help you determine which option works best with your current needs and ultimate retirement goals. 401k calculators can also help you determine how much to contribute to meet your retirement savings goals.


You can technically begin receiving distributions from either type of account when you turn 59 1/2 years old. However, a Roth 401k comes with a 5-year holding period. This means that, even if you reach the qualifying age, you can only receive distributions if you’ve held the account for at least five years. If you have a Traditional 401k, you can receive distributions as soon as you turn 59 1/2, no matter how long you’ve held the account.

With either account, taking distributions is optional until age 72. If you leave your account alone until then, it can continue to grow and build wealth. However, once you turn 72, you must take the required minimum distributions (RMDs).