Roll that Old 40l(k) Now

What happens to your 40l(k) or 403(b) retirement plan when you leave your job or retire? Nothing - unless you make a decision to roll it over into a different investment. But under the stress of leaving a job, many people figure they don't want to deal with the hassle of choosing a new retirement plan custodian. So they just let their money sit in the old plan. And that could be a big mistake.

When you leave your job for whatever reason, you have four choices. You can leave the money in your former employer's plan, roll it into the plan at your new job, roll it over into an IRA at a mutual fund company or financial advisor, or simply withdraw the cash. Taking the cash is a huge mistake, because you'll pay a 10 percent penalty if under age 59-1/2, along with ordinary income taxes -- and you'll lose all the future tax-deferred growth on your money.

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