The decision to roll a 401(k) over to an IRA shouldn’t be taken lightly. Eight points to consider:
1. Are you happy with your former employer’s plan? It might make more sense to stay.
2. If you have commingled deductible and non-deducted IRA contributions in your outside IRA accounts, having an active 401(k) plan can help you to “separate” the deductible IRA assets from the non-deducted.
3. If you have an investment in your former employer’s stock in your 401(k), you need to consider the ramifications of utilizing the Net Unrealized Appreciation (NUA) option – before doing a rollover.
4. If you think you may be returning to this employer, it might make sense to leave your funds where they are.