If you are switching to a new job, you will need to decide what to do with the funds that are in your retirement accounts at your old job. Taking the time to carefully weigh your options in order to make the best financial decision can be critical to your retirement planning.

You generally will have four options: cashing out your account, leaving your account as is, rolling over your funds to your new employer’s plan, or rolling over your funds to an individual IRA.

Cashing out your retirement account

Taking the cash out of your old employer’s retirement account is not usually a smart move. If you must do this, be prepared to pay a hefty tax bill. Additionally, realize that you will be reducing your retirement savings, which is likely to have consequences down the road. However, if you are very young and your account has a minimal balance, or if you are over 55 and will not be faced with withdrawal penalties, you might want to carefully consider cashing out.

Leaving your account as is

Your next option is to leave your account as is with your past employer. While this is the easiest option, it is not always a smart move. With this option, you will not be able to make new contributions to your account, and you may have limited or no control over your account’s portfolio. Additionally, you may be charged extra maintenance fees because you are no longer an employee. Before choosing this option, check your plan’s terms very carefully to see how these issues will be addressed.

Rolling your account over to your new employer’s plan

Another option is to roll over your current retirement fund into your new employer’s plan. This will keep your finances simple and will allow your funds to all be in one place. If you are considering this option, take a close look at the plan into which you will be rolling your funds. Is it flexible? Will you have control of your money? Can you diversify your contributions? If the plan looks good, then you should definitely consider it.

Rolling your account into an individual IRA

A final option is to roll your account into an IRA. This may be the best move, as it allows you to have total control of your money. You get to decide how all of your funds are dispersed and you can diversify your portfolio to your liking. To avoid paying taxes, you will need to make sure that you open the account first and then do a transfer of funds.

Making the right retirement planning decision for you

If you have changed jobs and need to decide what to do with your old retirement account, carefully look at each option to decide what is best for you. Look at what benefits you would get from keeping your current plan, rolling into your new work plan, or opening an IRA. And remember that while cashing out is an option, it should usually be avoided.

Jeff Rose is a certified financial planner and author of the blogs Good Financial Cents and Soldier of Finance.  Learn more about his Roth IRA Movement that has inspired over 140 personal finance to educate young adults on the importance of saving.