Changing Jobs - Don't Forget Your 401K

Back in the 60's most people went to work for one compay and stayed with that company until they retired. Today the job market seems to be constantly changing. The U.S. Department of Labor figures show that the youngest baby boomers (ages 42–49) have, on average, held more than 10 different jobs during their careers.

Below is a chart From Charles Schwab listing the options you have when it comes to your 401K plan:

	Option	Pros	Cons
	Roll over to new employer's plan	Avoid early withdrawal penalties. Money continues to grow tax-deferred.	May have a limited number of investment choices May have limited ability to make exchanges among funds in your plan.
	Roll over to an IRA	Avoid early withdrawal penalties. Money continues to grow tax-deferred. Offers more options than employer plan.	Can't borrow against the assets. May have to pay an annual fee.
	Leave in former employer's plan	Avoid early withdrawal penalties. Money continues to grow tax-deferred. Retain the ability to roll over to an IRA or new employer's plan at a later date.	Can no longer contribute to former employer's plan. May have a limited number of investment choices. May have limited ability to make exchanges among funds in your plan.
	Take a cash distribution	Can provide cash when facing extraordinary financial difficulties.	If you are younger than age 59½, you'll face a 10% early withdrawal tax penalty and a 20% federal mandatory tax withholding. Money no longer grows tax-deferred. You may face goal short-fall risk—the risk that you won't have enough money for retirement.

Source:
'Managing Your Finances When Changing Jobs' , by Charles Schwab & Co., Inc.