If you have a job, you are probably pretty sure you don't want to have it forever.  That is why we plan on retiring.  You can't retire if you dont have a source of income set up for after retirement.  If you don't have a pension, or even if you do but you want to have a bit more saved, you can open up a retirement account.

One common retirement account is the 401K.  This is a great option because it allows you to contribute tax-free money into a mutual fund and often employers will partially or completely match your contributions up to a certain amount.  The problem comes when you go to change jobs.

In the past, people stayed with the same employer for most or all of their lives.  These days it's a different story. People change jobs several times throughout their career.  This is one turn off to having only a pension, but it is also an obstacle to having a 401K.

If you've set up a 401K with your employer and have been faithfully contributing, you are doing a great job, but when you change your place of employment, you have 2 options, to cash out your 401K or to do a 401K rollover.  Cashing out is a big mistake.  It will cost you a lot in fees and you will also have to pay taxes on it.

On top of that, you no longer have the money set aside for retirement and many people take it as free money to spend as they please.  A much better plan is a 401K rollover into either your new 401K or into an IRA (Individual Retirement Account).

Doing a 401K rollover into the 401K with your new employer is your first option.  This is not the ideal option.  The problem is that you lose your ability to choose your own investments.  You invest in what the employer fund invests in which is rarely as good as other choices available.

You are probably thinking that the money was invested in your old employer's 401K fund choice, so what's the difference?  To be honest, the choice of the fund before probably wasn't that great either, but now you have the chance to move that into your fund of choice with an IRA.  You might as well take the chance while you can.

Of course, continue with a 401K with your new employer especially if they over a match to your contribution.  That is not something you should pass up.

The process of rolling over your 401K is not that difficult, but make sure you don't put it off.  You will need to be in contact with both your old provider and the place where you will be rolling over the 401K funds into.

After that, you need to figure out where to rollover the 401K into.  Get the correct forms, fill them out, and submit.  Follow the instructions and follow it up afterwards to make sure you do everything right. 

It's really not that difficult of a process and I can't tell you exactly what to do because it will vary depending on the IRA or 401K provider you are rolling over into.

Once you complete your 401K rollover, continue adding to your new 401K.  If you roll it over into an IRA, contribute to that when you can, too, to increase your retirement funds even more.  Better yet, set aside a certain amount each month to put into your IRA.