You've left a job where you have money in a 401(k) plan. Do you leave it at your old employer, or roll it over into one of three choices: the 401(k) plan at your new employer, an individual retirement account or a Roth IRA?
In deciding where to move the money in your account, first consider that you're likely better off making one of those choices rather than taking the money as a lump-sum withdrawal. That's because you could be on the hook for paying regular income tax as well as a 10% penalty tax on the amount withdrawn. Plus, if it's big enough the lump sum could bump you into a higher tax bracket.
Lawrence Carrell | Investor’s Business Daily