It's almost always best to take your 401(k) money with you when you leave a job. But there are times when it makes sense to leave the money with your former employer. Consider doing so if:

  • You are satisfied with the investment choices you have in that plan.

  • Your investment costs are lower than you can get elsewhere.

  • Your financial situation is such that you need the bankruptcy protection provided by qualified retirement plans.

  • Your plan allows former employees to borrow against their 401(k) accounts and you believe you will want to do so in the future.

Most employer-sponsored retirement plans will force you to move your money (via rollover or direct transfer) if you have less than $5,000 in your account. If you have $5,000 or more, though, you may leave the money in your 401(k) until the normal retirement age specified by that plan.

Regardless of whether you stay or go, don't stop investing in your current employer's retirement plan -- especially if there's some sort of matching program. And while it may be tempting to cash that check and throw a "new job bash" like no other, don't do it. You'll pay a pretty penny to Uncle Sam in early withdrawal taxes, and shortchange your future self. It's so simple to open an IRA; do it before the temptation sets in.