For Mark Roberts’ Use: If you’ve been contributing to your employer-sponsored retirement plan, then congratulations! You’re making smart decisions about your future, and you’re well on your way to a more comfortable retirement.

At some point, though, you may change jobs. Whether you’re forced to do so due to company downsizing, or choose to go elsewhere for better opportunities, you still have to face a big decision: What to do with that employer-sponsored retirement account? In general, you have four choices:

  • Leave the money right where it is, in your former employer’s retirement plan (if allowed)
  • Roll the money into your new employer’s retirement plan, if the employer offers a plan and allows rollovers
  • Roll the money into an IRA
  • Take a cash distribution

Each of these options carries benefits and drawbacks. But in general, the first three choices allow you to preserve the current tax-advantaged status of your retirement fund, and to continue enjoying tax-deferred growth of your assets.

The fourth option – taking a cash distribution – can be cause problems if you use the funds for a non-tax-advantaged purpose. Taking a cash distribution may cost you a 10 percent early withdrawal penalty, and the money will be taxable as income. Of course, the biggest problem is that you deplete your retirement account and could come up short on funds when you retire someday.

Consider the hypothetical case of a 30-year-old worker who changes jobs and elects to take a cash distribution of his former employer’s retirement fund. In this scenario, the worker eventually retires at age 67 and lives to 93. If the fictional worker withdraws 16,000 dollars, he just cost himself 500 dollars per month of retirement income.

Changing jobs can be stressful, no matter what the reason. But rather than making quick, uninformed decisions about your retirement fund, be sure to consult with your financial advisor about your options. Find the best way to preserve your savings, so that you don’t regret your decision later when you retire.