As you move ahead from job to job, don’t make the mistake of leaving a trail of old savings accounts behind you. Put your hard-earned savings to work for you by looking at all the options.

If you’ve left a job and a 401k, here are the options available to you for those funds.

1. Leave your balance with the old plan.

This is certainly the easiest option; you don’t have to do anything and your money stays in the old 401(k) and will (hopefully) grow until you need it in retirement. But the drawback is that you are still subject to your current plan's rules and limited investment choices, and it won’t be easy to make changes to your investments if you’re no longer there.

Leaving your old 401(k) in place can be a good option if you're between ages 55 and 59 ½ and you will need your retirement savings soon. If you leave your job after age 55 you can take penalty-free withdrawals (although you will still pay income taxes). With an IRA, you must wait until age 59 ½ to withdraw the money penalty-free.

2. Rollover to your new employer’s 401(k) plan.

This can be a good option if your new employer’s plan accepts transfers, and if you are happy with the new plan’s investment choices and the fees are reasonable. Having one 401(k) plan makes it easier to track the performance of your investments over time and to make changes.

Initiate the rollover with your new plan provider, and have your old administrator send the funds directly to the new plan. You may need to wait a period of time in the new job until you can make the transfer.

3. Rollover to an IRA.

You can rollover your 401(k) to an IRA at the financial institution of your choice. This gives you access to many more investment options, including individual stocks, real estate investments and commodities. You’ll have more flexibility to manage your investments over time and maximize your returns. Always make sure you understand the annual fees you will be charged for your Rollover IRA.

Ask your plan provider to do a direct rollover, where they transfer your funds directly into the IRA account. You will need to fill out forms.

Warning: if they give the money directly to you, they will withhold 20% for taxes. You have 60 days to put that money into an IRA, but you will also have to deposit the 20% that was withheld—a complication that’s best to avoid.

4. Cash out your 401(k).

WARNING! If you take a “lump-sum distribution” instead of rolling your 401(k) over to an IRA or a new employer’s plan, you will have to pay income taxes on the money. You will also pay a 10% early withdrawal penalty if you're under age 59 ½. Not only do you lose money, but you lose valuable time in building savings, and may never catch up. *

* This hypothetical example assumes the following: (1) One annual $5,500 IRA contribution made on January 1 of the first year, (2) annual rate of return of 7%, and (3), no taxes on any earnings within the IRA. The ending values do not reflect taxes, fees or inflation. If they did, amounts would be lower. Earnings and pretax (deductible) contributions from a traditional IRA are subject to taxes when withdrawn. Earnings distributed from Roth IRAs are income tax free provided certain requirements are met. IRA distributions before age 50-1/2 may also be subject to a 10% penalty. Systematic investing does not ensure a profit and does not protect against loss in a declining market. Consider your current and anticipated investment horizon when making an investment decision, as the illustration may not reflect this. The assumed rate of return used in this example is not guaranteed. Investments that have potential for a 7% annual rate of return also come with risk of loss.

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