Give your old 401(k) a plan.

When you leave a job, your 401(k) doesn’t automatically come with you. It often just stays where it is, quietly waiting. That’s fine for a while. But it’s worth giving it a plan, so it doesn’t get lost or forgotten.

You have a few main options. None of them is right for everyone. The best fit depends on your plan’s rules, your fees, your investment choices and your tax situation.

Your four main options

1. Leave it in your old plan

Many plans let you keep your money where it is after you leave. This can make sense if you like the plan’s investments and its fees are low.

Keep in mind that if your balance is small, your old employer may be allowed to move it out of the plan for you. Check your plan’s rules so you’re not caught off guard.

2. Roll it into your new employer’s plan

If your new employer’s plan accepts rollovers, you can move your old balance there. A rollover means moving retirement money from one account to another while keeping its tax benefits.

This can make life simpler, with fewer accounts to track. Before you move, compare the two plans’ investment options and fees. Your new employer’s benefits or HR office can tell you whether the plan accepts rollovers.

3. Roll it into an IRA

You can also roll your old 401(k) into an IRA, an individual retirement account you open on your own. IRAs often offer more investment choices than workplace plans. But some workplace plans offer lower-cost funds than you could buy on your own, and protection from creditors can differ between plans and IRAs, so compare both before you move money. An IRA can also be a place to combine several old accounts.

You can roll a traditional 401(k) into a traditional IRA. You can also roll it into a Roth IRA. If you do, the untaxed amount becomes taxable income for that year.

4. Cash it out

You can take the money as a lump sum. This is the option that usually costs the most.

• Income tax. The untaxed amount you receive is generally taxed as income for the year.
• A possible 10% additional tax. Withdrawals before age 59½ generally carry an additional 10% tax unless an exception applies. One exception applies to workplace plans: if you leave your job in or after the year you turn 55, the 10% additional tax generally doesn’t apply to that plan. This exception doesn’t apply to IRAs.
• Lost growth. Money you take out now stops growing for your retirement.

If you need the cash, that’s real. It can still help to talk with your plan administrator or a tax professional first. They can help you see the full cost before you decide.

Direct vs. indirect rollovers

If you decide to move your money, how you move it matters.

Direct rollover

In a direct rollover, your old plan sends the money straight to your new plan or IRA. The money never passes through your hands, and no tax is withheld. You ask your old plan administrator to make the payment to the new account.

For most people, this is the simpler and safer route.

Indirect rollover and the 60-day rule

In an indirect rollover, your old plan pays the money to you. You then have 60 days to deposit it into another retirement plan or IRA.

There’s a catch. When a plan pays you directly, it generally must withhold 20% for taxes, even if you plan to roll the money over. To roll over the full amount, you’d need to make up that 20% from other savings.

Here’s an example: if your old plan pays out $10,000, it withholds $2,000 and sends you $8,000. To roll over the full $10,000, you’d deposit the $8,000 plus $2,000 of your own money within 60 days.

Any amount you don’t roll over in time is generally taxable. It may also face the 10% additional tax if you’re younger than 59½. The IRS may waive the 60-day deadline in some situations beyond your control, but it’s best not to count on that.

Watch for fees

Fees can quietly reduce your savings over time. Workplace plans often charge asset-based fees, which are taken out before your returns are reported. IRAs have their own costs, too.

When you compare options, look at:

• What each investment option costs each year.
• Any account or administrative fees.
• Any fees to move money out of your old plan.

Your account statement and your plan’s Summary Plan Description can show you what you’re paying now.

Keep your beneficiaries up to date

Your beneficiary is the person you name to receive your account if you die. Beneficiary designations usually override instructions in your will. A designation may not update itself after a marriage or divorce, and the rules differ by account type and state.

In most 401(k) plans, your spouse is entitled to be your primary beneficiary unless they sign a waiver. Review your beneficiaries after any big life change. Whenever you move money to a new plan or IRA, check that your beneficiaries are named the way you want.

Your next step

Find your most recent statement for your old 401(k) and write down three things: the balance, the yearly fees and who is listed as your beneficiary. With those in hand, you’ll be ready to compare your options calmly.