As an added value service to plan participants, many 401k plans offer a personal financial advisor for participants to work with. The advisor should help you to understand your options for 401k distributions when you leave employment.

You have several distribution alternatives available. 1) you can choose to not make any 401k distributions but rather leave your 401k account balance in the same employer plan. 2) you can make a 401k distribution to an IRA account. 3) you can make a 401k distribution to your new employers plan or 4) take an early distribution and not put the money in any qualified retirement plan. If you choose this option and are under age 59 ½ you will be subject to taxes and as 10% early distribution penalty.

The 401k rollover rules were established by the IRS to be relatively simple to follow. If you are in doubt about any of the rules, check with your plan administrator.