Here are some reasonable options to consider whether it’s to cash out, or retain the tax-deferred benefits attached to your assets:

1. Take the Cash: When people make financial decisions they may choose to do so based on interest rates and cash in hand. But another important factor to consider is taxes. When you take cash distributions from your 401(k) account, you may pay a lot of money in taxes and fees. This includes a 20% federal withholding tax and then another 10% penalty for people who are under the age of 59 and a half years old.
2. Directly Roll the Money Into an IRA: An individual retirement account is much like a 401(k), but it can remain independent of any employer. You may want to consider this option if you change jobs often or if a new employer does not offer retirement plans.
3. Use the New Employer’s Plan: Some professionals prefer to keep rolling their 401(k) savings forward. You may want to consider this option if you mostly work corporate jobs with good 401(k) plans. Rolling the money over directly from one employer to the next may also help to eliminate any fees from the IRS. Note that even if you are not yet eligible to contribute to your new employer’s retirement plan, you should be able to roll over your money.
4. Keep the Old Plan: If you have at least $5,000 in your old retirement account, your employer must allow you to retain your 401(k) account if you want to. You can no longer make contributions to the account, but you can make decisions regarding the investment of your assets. You may want to consider this option if you leave your job to start a business, or want to add some diversity to your retirement holdings.