<prompt> Human: My current employer doesnt offer any kind of a retirement plan and Im getting about 20 interest on the 3000 I have in it. I just graduated from college in May and Im wondering if I should just let that money sit or if I should invest it in some other long term account. I have about 15000 in a general savings account as well.  <response>: Should I transfer the funds in my 401k to a mutual fund or IRA?Yes and yes.And IRA is an INDIVIDUAL RETIREMENT ACCOUNT. You need to open one and specify that you want to roll over a 401k.This will properly move your retirement account into another retirement account. Once the money from selling the existing securities in the 401k are in your rollover IRA you can invest them in mutual funds of your choosing.The keeps the account and gains as tax free and you will incur no tax penalty.You need to do this properly or you will have to pay both income tax and a 10 penalty on what you withdraw from the 401k. 