BECAUSE 401Ks are often a cornerstone of retirement plans, workers switching jobs should make sure that their funds continue to provide the most benefit and bang for their buck, says Dave Braze, personal finance and retirement planning specialist for The Motley Fool, in Alexandria, Va.

Option 1: Leaving it with former employer

If you have more than $5,000 in your 401k, the law states that you can leave the funds in your former employer's plan until you reach the "normal retirement age" as defined by that plan.

"If you're satisfied with the investments that that 401k plan has, it's probably OK [to leave it with the former company], provided the costs of those investments are lower than you can get somewhere else, [which is] not likely," Braze says. If you have less than $5,000 in your 401k, however, a company will likely force you to take your funds when you leave, he adds.

Option 2: Transferring it to new company's plan

Moving existing funds into a 401k offered by your new employer can be a good way to ensure that your retirement fund continues to earn interest. But before making such a move, workers should take a close look at the parameters of their new company's 401k plan. Most will have a waiting period before a new employee can join the 401k plan, preventing the automatic transfer of old funds.

Negotiating to skip a 401k waiting period may be tough if not nearly impossible. Braze notes that some plans have rules dictating that money will not be accepted from employees' former plans at all.

Option3: Transferring it into an IRA

An IRA can be one of the most secure places to put 401k funds because it continues to compound, tax-deferred, Braze says. In addition, almost all states provide protection for an IRA from the holder's personal bankruptcy.

Moving an existing 401k into an IRA can be done using direct account-to-account transfer or by rollover where the employee actually receives a check that must be deposited into an IRA within 60 days. Braze considers direct transfer to be a better choice than rollover.

"In a rollover, automatically by law the plan must withhold 20 percent of whatever it's distributing from that plan. So if you had $100,000 in your 401k, $20,000 would immediately be taken out for withholding and sent to the IRS, just like your paycheck," Braze explains. "But if you don't come up with that

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