Whenever you switch a job or retire from a company, you should always roll over your 401(k) or 403(b) from your previous company to an IRA account called Rollover IRA with Fidelity, Charles Schwab or any other brokerage companies. There are no any tax consequencies when moving your money over to a Rollover IRA account. You should not leave it with their previous company or roll over to your current company's 401(k) or 403(b) plan.
Some companies even will let you to roll over your 401(k) or 403(b) money while you are still employed with the company, the process is called ‘In Service Distribution’. Please check with your company’s 401(k) or 403(b) administrator about this.
There are two benefits of rolling the 401(k) or 403(b) money to an IRA.
The first big benefit by rolling over to an IRA is that you have just lowered your management fees significantly since 401(k) or 403(b) administrators charge a higher fee than most of mutual fund companies. These fees are all hidden from you and it is hard to find on your 401(k) or 403(b) statements.
The other benefit of rolling over to an IRA is that you will have thousands mutual funds, stocks, bonds, and ETF's to choose from instead of 10 to 20 mutual fund choices with a company's 401(k) or 403(b).
