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If you have a retirement account or two from former employers, then you may be thinking about rolling those accounts into a single IRA. While this can be a smart financial move, there are a few things you should know before you make your decision. Here are three things to keep in mind, so you can make sure that rolling over into an IRA is the best decision for you.

Dan Caplinger
One thing to consider before rolling over an IRA is whether there's a better option for you. Technically speaking, a rollover involves your taking possession of your retirement-plan cash and then sending it on to the financial institution that will manage your IRA. In the process, your employer will typically withhold 20% of the account balance in your retirement plan to comply with IRS requirements, and that will leave you 20% short when you deposit the funds in your IRA. To avoid penalties and tax consequences, you have to come up with that 20% somewhere else and you won't get it back until you file your tax return for the year and get a refund. Moreover, if you miss the 60-day window for getting all this done, then the entire transfer can end up being taxable, and you might have to pay penalties as well.

By contrast, a direct transfer between your employer and the financial institution avoids many of these uncertainties. You never have control of your money, so no withholding is necessary, and every penny of your retirement account ends up in the target IRA.

If you need short-term use of your money, then a true rollover can actually be useful. For most people, though, a direct transfer will meet the primary goal of getting your money out of an employer plan and into an IRA that's under your complete control.

Jason Hall
First of all, educate yourself. Don't just let a financial advisor with no fiduciary duty sell you underperforming investments.

I have a close friend who has been using "her guy" at a well-known investment advisory company for years, and her plan had been to simply let him run the show. "He's good," she told me when we talked investing on occasion. I never pressed the issue despite the overwhelming evidence that most financial advisors' advice leads to market underperformance and unnecessary fees to top it off.

The short version is this: Recently, after a job change, her financial advisor tried to convince her to roll over her 401(k) to his firm, but she noticed that her account had lost value this year, and she began asking questions.

It turns out the expensive, actively managed mutual funds she had been advised to invest in had all significantly underperformed the S&P 500 over the past seven years. Yes, every single one -- and they didn't even come close to matching the market.

Completely relying on a financial advisor's recommendations -- all funds that pay commissions to advisors and yet routinely underperform their benchmark -- cost her tens of thousands of dollars in lost returns that she could have saved with any low-cost S&P 500 index fund.

And although she's still young enough that this shouldn't affect the quality of her retirement in a couple of decades, she was lucky that she discovered this closer to 40 than to 60.

Matt Frankel
One thing all investors need to consider before rolling over your retirement savings to an IRA is what you're going to invest in after the rollover is complete -- and this is especially true if your retirement savings are currently in an employer's plan like a 401(k) or thrift savings.

My basic rule for rollovers is simple. If you want the freedom to invest your money in individual stocks and bonds as you see fit, an IRA rollover is the right move for you. On the other hand, if you are happy simply investing in funds and leaving your account alone, then you may be better off leaving the money where it is.

Retirement plans have access to "institutional" shares of mutual funds, which generally charge much lower fees but have high minimum investment requirements. For example, the PIMCO Total Return Fund is one of the most popular mutual funds held in retirement plans. The institutional version (NASDAQMUTFUND:PTTRX) has an overall expense ratio of 0.46%, while the retail version (NASDAQMUTFUND:PTRRX) has a much higher 1.10% fee. This may sound like a small difference, but it can mean thousands of dollars, or even tens of thousands, over the course of a few decades.

In short, if you plan to invest in mutual funds, make sure you consider the fees involved before (and after) you roll over your account.

Dan Caplinger has no position in any stocks mentioned. Jason Hall has no position in any stocks mentioned. Matthew Frankel has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.