Make rollover mistakes. Once you decide to move your money, take care to avoid taxes and penalties. Ask your former employer to directly transfer your savings to the financial institution hosting your IRA or your new employer's retirement plan. This way, you'll avoid having income tax withheld and don't have to worry about the 60-day time limit for depositing the entire balance, including the amount withheld, into a new tax-deferred account before additional taxes and penalties may be applied. However, consider leaving behind any company stock from your former employer, which gets special tax treatment when held in that employer's 401(k) plan. "The primary reason you would roll it into your new company's 401(k) is if your new company has borrowing provisions in the 401(k) and you believe it is likely that you will be borrowing against your 401(k) balance," says Orecchio. If you're close to retirement, it's worth noting that retirees can begin taking penalty-free 401(k) withdrawals at age 55, while they must wait until age 59½ to take IRA withdrawals without facing the 10 percent early-withdrawal penalty.