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What if I leave my job?

You have up to four options:

1. Move the money into an IRA rollover account at a mutual fund company or discount brokerage. This is typically the smartest move. Your money continues to grow tax-deferred, but you are no longer limited to the investment choices within your old plan. The fund company or brokerage that will administer your new account can provide a rollover application. Make sure you choose "direct rollover" as the method for moving the money from your old employer into your new rollover IRA. In a direct rollover, your old employer writes a check directly to the fund company or brokerage firm that administers the IRA. If the check is made out to you, your old company must withhold a portion of your money for taxes.

2. Move the money into your new employer's plan. Check with your new company: Not all defined contribution plans allow this move.

3. Leave the money right where it is. Your former employer may not allow you to stay in the plan if your account balance is less than $5,000, however. And because you're no longer an employee, you may miss out on important information about plan changes and investment options.

4. Cash out and take the money as a distribution. This is a bad idea, because your money will no longer have the advantages of tax-deferred growth. Worse, you'll pay income tax on the entire amount of the distribution, and you'll be hit with a 10% early withdrawal penalty if you aren't yet 59 ½ years old.

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