Gone are the days when most people stuck with the same employer for most of their working lives. Nowadays, it's quite common for people to change jobs every few years. If this sounds like you, there are some important retirement concepts you should consider.

Keep the nest egg growing
As the years go by, fewer and fewer workers are enrolled in defined-benefit retirement plans, often referred to as "pensions." Instead, most of us have 401(k) plans, or plans very much like them. This can be fine, as long as you're making the most of your 401(k). (One of the worst things to do is to not take full advantage of any matching money your employer offers. That's free money -- grab it!)

Another common mistake, perhaps one that happens more often with those who change jobs frequently, is cashing out of your 401(k) plan when you leave a job. You may not think that the $7,200 socked away is worth leaving invested, but trust me -- it is, especially when you add to it the $12,500 you'll sock away at the next job, and the $8,800 from the job after that.

If you leave just $7,200 invested and growing at an annual average rate of 10%, it will become $18,675 in a decade. In 20 years, it will reach $48,440, and in 30 years, it will top $125,000 -- and that's just from a modest $7,200 acorn.

Roll over that 401(k)
When you change jobs, you're typically informed that you need to decide what to do with the funds in your 401(k). One option is taking it as cash (though you'll owe tax on it and may face some penalties as well). Another is rolling it over into an IRA. Give serious consideration to this second option. A third option some folks have is just leaving the money in the account until retirement. This is also worth considering.

Let's look at that third option briefly. Why would you leave it in the existing plan? Well, you might do so if you are completely satisfied with your investment options there. Does the plan offer the mutual funds you want, such as a broad-market index fund that tracks the S&P 500 or the Wilshire 5000? If so, perhaps stay put. But if the only offerings are more conservative (or aggressive) than you want, start packing.

Rolling over your account into an IRA has a bunch of benefits. For one thing, your money gets to continue growing on a tax-deferred basis. Another benefit is greater flexibility. In the IRA, you can invest in a very wide variety of securities, such as individual stocks, bonds, mutual funds, and more.

Rollover tips
Here are a few tips for those considering rolling over money:

  • It's often a good idea to roll over your funds into a new IRA account. In other words, if you already have an IRA, don't think you'll make your life simpler by just dumping this new sum into your existing account. It's not much trouble to set up a new IRA with these funds. Doing so might let you later transfer the funds into another company-sponsored plan.
  • If your 401(k) has a significant amount of stock in the company where you worked, you should read up on taking advantage of rules pertaining to "net unrealized appreciation" (or NUA). Nathan Slaughter wrote about this a while back.
  • Don't count the amount of the rollover as part of your annual contribution to an IRA. That's a separate calculation.
  • Look into having your money moved into your new IRA account via a "direct transfer" ("trustee-to-trustee") instead of a traditional rollover. This can save you some headaches. Dave Braze explained this in more detail in a past article.
  • Read this Roy Lewis article for more background on these retirement and tax issues.

Keep learning
There's a lot to like about IRAs. Learn much more in our IRA Center, which features info on the various kinds of IRAs, eligibility restrictions, and ways to open an IRA. It even offers a comparison chart for IRA accounts at Ameritrade (NASDAQ:AMTD), E*Trade (NYSE:ET), and Sharebuilder, permitting you to see fees and other data at a glance. Other brokerages offering IRAs include T. Rowe Price (NASDAQ:TROW), Charles Schwab (NASDAQ:SCHW), and A.G. Edwards (NYSE:AGE).

Finally, if the thought of making important decisions like these on your own has you a little scared, know that there's no shame in seeking some professional help. (Heck, it makes sense to do so!) I invite you to tap the expertise of a new breed of financial advisor via our TMF Money Advisor service, which offers low-cost, personalized, professional financial advice by phone or Internet. These folks can help you plan your retirement, save for college expenses, make estate-planning arrangements, answer tax questions, and more. And you can try them out for free.

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Selena Maranjian 's favorite discussion boards include Book Club , Eclectic Library, Television Banter, and Card & Board Games. She owns shares of no company mentioned in this article. For more about Selena, viewher bio and her profile. You might also be interested in these books she has written or co-written:The Motley Fool Money GuideandThe Motley Fool Investment Guide for Teens. The Motley Fool is Fools writing for Fools.