Changing jobs?
A recent survey completed by Fidelity Investments showed that approximately 1 in 3 people who were changing jobs touched their old employer’s 401k. Cashing out your old 401k will cause one to pay income taxes, along with penalty taxes if one is not of age.
Touching this precious “Retirement Money” takes away from the money’s potential to compound upon itself, accelerating growth in your retirement account.
How to avoid the penalty and current income taxes on an old employer 401k?… Roll it over into a traditional IRA. This will give you the same preferential tax treatment that your old employer plan had and continue to keep you on track towards retirement.
Fidelity Investments article:
https://workplace.fidelity.com/resources/cost-cashing-out.html