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Originally Posted by John Run
I will make one very important point, that I have seen people get screwed on. They seperate from their employer, they take a lump sum withdrawal of their entire account balance with the intention of taking the entire amount and rolling it into an IRA or a new employer sponsored plan. However they get the check payable to them and not the IRA Fund or the Plan name. They are then repsonsible for all taxes and penalties even if they do roll it over. You may be able to reduce the taxes if you can prove roll over, but you can't avoid the penalty. Then when you finally do retire you end up getting taxed on it again. So the lesson.....never get the check made out you. Get it made out to the name of the fund or plan sponsor. This will ensure you pay no taxes or penalty.
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Excellent warning, John Run. I left a company about eight years ago, & I took my 401(k) funds with me. But I had the check cut to USAA Investment Bank -- direct rollover to USAA mutual fund retirement account -- so I avoided all penalties.
My 401(k) currently is managed by Fidelity. Performance is fairly good, not great -- but then the whole stock market is pretty lethargic.