If you have left your employer to pursue another job then there is something you should consider taking with you something that many employees leave behind: their retirement plan. Specifically, if you have a 401(k) plan leaving it behind could be a problem. Read on and we’ll see exactly why moving your retirement plan out of the capable hands of your former employer is a wise decision.

Legally, you do not have to move your retirement plan when you leave your former employer. However, if your balance is five thousand dollars or less your employer can bid you goodbye and send you away with a check. Of course, rolling those funds over to a new retirement account or IRA will keep you from getting taxed, therefore if you take any disbursement you will want to reinvest it right away.

In many cases leaving your 401(k) behind is fine but you end up missing out on several benefits including:

Keeping close track of your investments. You will still be notified about plan changes and receive quarterly statements, but you won’t have access to company sponsored advice or be able to make any additional contributions to your account. If you move your 401(k) to your new employer the monies can be rolled over to the new retirement account and you can select whatever investment options you want.

Moving money to an IRA. If your new employer’s plan does not excite you, you may want to move your funds to an Individual Retirement Plan. This can be a nice option to take especially if you don’t expect to stay at your new employer for long. With an IRA it doesn’t matter who you are working for; you will be able to keep control over the funds yourself.

You can borrow money. Although borrowing money from your 401(k) account isn’t widely recommended you cannot do this if your money is sitting with your former employer. If you move your funds over, you can borrow from the account for a down payment on a house or other important life need.

If you retire early, let’s say at age 56, you can start withdrawing money from your 401(k) without penalty. With an IRA you can only start withdrawing penalty free at 59 ½.

Yes, taking your money with you makes much sense. After all, who do you think cares more about you – you or your employer?

Jeff Lakie is writer for the credit help website, a new trend called credit card has been stirring up quite a commotion. Visit us today to find out why.