The first option you have with your 401k account is to leave it with your existing provider. Even if you transfer jobs, this can sometimes still be an option. You will lose a degree of flexibility, and the company may have policies regarding how long the account may remain under their administration.

The next option available is to transfer the account to another 401k plan. If you are changing jobs, the transfer from one 401k to another can be quite painless. All that this type of transfer generally takes is coordinating the transfer with the respective account administrators.

In the past decade or two, transfer from your 401k account to a traditional IRA account has become more and more prevalent. This allows you the ability to transfer your funds into a similar tax-advantaged account, but provides you a number of distinct advantages. It is much easier to carry your tax-deferred account through generations in an individual retirement arrangement.

Up until just recently, a 401k rollover to Roth IRA was difficult if not altogether impossible. Although direct transfers were not allowed, creative planners were able to get the funds into the account eventually. This generally required a number of transfers between different retirement vehicles, and ended up being costly and difficult. With new legislation, direct 401k to Roths are possible.

Determining the best way to transfer your funds can be complicated and case by case specific. Make sure that you understand the various options available and make the necessary preparations before attempting a transfer. The IRS allows you only a brief window in which to transfer your funds before they hit you with steep penalties and fees.