when you leave a company where you ve been employed and you have a 401 k plan you generally have four options 
withdrawing the money is usually a bad idea unless you urgently need it the money will be taxable for the year it s withdrawn you will be hit with the additional 10 early distribution tax unless you are over 59 permanently disabled or meet the other irs criteria for an exemption from the rule 3423for a roth 401 k you can withdraw your contributions but not any profits tax free and without penalty at any time if you have had the account for at least five years 17 however you re still decreasing your retirement savings which you may regret later moving the money into an ira at a brokerage firm a mutual fund company or a bank means avoiding immediate taxes and maintaining the account s tax advantaged status what s more you can choose from among a wider range of investment choices than with your employer s plan 34the irs has relatively strict rules on rollovers and how they need to be accomplished running afoul of them is costly 35 typically the financial institution in line to receive the money will help with the process to prevent any missteps funds withdrawn from your 401 k must be rolled over to another retirement account within 60 days to avoid taxes and penalties 35in many cases employers permit a departing employee to keep a 401 k account indefinitely in their old plan though the employee can t contribute further this generally applies to accounts worth at least 5 000 for smaller accounts the employer may give the employee no choice but to move the money elsewhere 34leaving the money where it is makes sense if the former employer s plan is well managed and you are satisfied with its investment choices the danger is that employees who change jobs throughout their careers can leave a trail of old 401 k plans and may forget about one or more of them their heirs might also be unaware of the existence of the accounts capitalize an investment platform specializing in rolling over forgotten or left behind 401 k accounts estimates that in 2023 there were almost 30 million such accounts in the u s holding about a quarter of americans total assets in 401 k plans 36you can usually move your 401 k balance to your new employer s plan 34 as with an ira rollover this maintains the account s tax deferred status and avoids immediate taxes if you aren t comfortable with managing a rollover ira you can leave some of the work to the new plan s administrator 