Owners of 401(k)s have options when they retire from their job. They can roll their entire 401(k) into a traditional IRA, which is the preferred route taken by many account owners, or they can leave funds in their former employer’s 401(k).
These decisions are based in part on a comparison of the available investment choices and the costs of each option, plus the ease of having all 401(k) assets in one IRA for a person who has had many jobs over his or her working life. Of course, you can also take a lump sum withdrawal of all your 401(k) assets in a taxable distribution, but this isn’t recommended because you would owe tax on the distribution.
