Direct Rollovers of 401(k)s and 403(b)s

When you change jobs the question always arises: what to do with the money in your 401(k) or 403(b)? Options may include:

Withdrawing the money in one lump sum. This can carry a heavy tax penalty.
Leaving the money in your previous employer's plan. This may be a good choice if the plan offers a range of attractive investments.
Rolling the money over. This can involve either transferring the funds to your new employer's 401(k) or rolling them over into an IRA. Both methods have to be done properly, however, to avoid unexpected tax consequences.