When you leave a job, your old 403(b), 457(b), or 401(k) does not vanish, but it does need a decision. There are exactly four things you can do with it. The trick is matching the option to your situation instead of letting the account drift by default.
The four options at a glance
| Option | Pros | Cons | Best for |
|---|---|---|---|
| Leave it where it is | Zero effort; keeps current funds; federal creditor protection in employer plans | Easy to forget; limited menu; possible ex-employee fees | The plan has great low-cost funds and a balance large enough to stay put. |
| Roll to your new plan | Consolidates into a plan you watch; stays in the employer-plan wrapper | New plan must accept it; you inherit its fees and menu | Your current district/employer plan is solid and accepts rollovers. |
| Roll to an IRA | Widest choice; usually lowest fees; one account for life | IRA penalty age is 59½; state-dependent creditor protection | You want control and lower fees. The most common pick. |
| Cash out | Immediate cash | Income tax + 10% penalty under 59½; 20% withheld; growth lost forever | Almost never, a true emergency only. |
How to actually decide
Work through three questions:
- Will you need the money before 59½? If yes, the account type matters a lot. A governmental 457(b) lets you withdraw penalty-free after you leave the job, an advantage you forfeit by rolling it into an IRA. See 457(b) Rollover Options.
- How good is the old plan? Many old 403(b)s are stuffed with high-fee annuities. If yours is, moving to an IRA or a better plan usually wins. If your old 401(k) holds cheap institutional funds, leaving it may be fine.
- Do you want one account or several? Consolidating into an IRA or your current plan means fewer logins, fewer fees, and a clearer picture. See how to combine old accounts.
Whatever you choose, move it the direct way
If you decide to move the money, request a direct (trustee-to-trustee) rollover so the funds never pass through your hands. That sidesteps the automatic 20% withholding and the 60-day redeposit deadline that turn a simple rollover into a tax bill. For the account-by-account specifics, start with the 403(b), 457(b) & 401(k) Rollover Guide or the old-401(k) walkthrough.