When you leave a job, you usually have some options for what to do with your old employer-sponsored retirement plan like a 401(k). It's often recommended that individuals roll over their assets into an individual retirement account, or IRA.

Typically, an IRA will have lower fees than a 401(k), but there's one thing you absolutely must check before you make the switch. Once you roll over your old 401(k) to an IRA, you won't be able to go back to your old employer's plan.

Piggy bank with the words Rollover IRA written on it.

Image source: Getty Images.

Check your mutual fund options

If you want to keep the same exact funds in your rollover IRA as you had in your old company's 401(k), you could find yourself paying a lot more in fees.

That's because mutual funds offer several classes of shares. Generally speaking, there are two different types of share classes: institutional shares and retail shares. Institutional shares require an investor to commit a large amount of capital, and investors receive a lower expense ratio in return. Retail shares are available to any investor and have low minimum investment requirements but typically charge a higher expense ratio.

Since you won't have the capital of an entire business's 401(k) trust fund to invest in your IRA, you're probably going to end up buying retail shares of the same mutual funds you held in your 401(k). And that can be a problem, because the expense ratios on retail shares of mutual funds are between 0.19 percentage points and 0.34 percentage points higher than institutional shares, according to research from Pew Charitable Trusts.

That might not sound like much, but consider that a fee of one-quarter of 1% on a $100,000 portfolio is $250. And that's just for one year. The effect compounds over time, costing investors thousands of dollars throughout their lifetimes.

That said, it may still be worth it to roll over to an IRA if the other fees in your old workplace 401(k) are high. Once you know how much more you might have to pay in investment fees, see if it's offset by a lack of administration fees or other fees associated with the plan.

A better option

One of the biggest advantages of an IRA over a 401(k) or other workplace retirement plans is that you typically have a lot more investment options with an IRA. While your workplace will require you to hold your 401(k) with a certain brokerage, and it probably had to select from a menu of fund options, you can invest wherever and in whatever you want with an IRA.

That may seem daunting, but you can keep it simple. You can easily open your IRA at a top online broker.

If you want to emulate your fund selection from your old 401(k), but at a lower cost, you can research the kinds of investments the funds you held were making. You can find that information in the prospectus you receive from the mutual fund companies after you last purchased shares. You can also look up that information online through the mutual fund company's website or third-party websites.

Your best bet is to use index funds to mimic the asset allocation provided by your mutual funds. There are index funds for just about any asset class, and the best part of an index fund is that the expense ratios are usually extremely low.

If all this sounds too complicated, you may want to pay up for an hour or two with a financial consultant. A good planner can help put you in the right investment options for your goals. And while it might cost a bit up front, the long-term savings from rolling your savings over into lower-fee funds and investment accounts will be worth it in the end.