Participants generally have four options when leaving their employer-sponsored plan:
They can leave the money in the former employer’s plan, if permitted;
Roll over the assets to a new employer’s plan, if one is available and rollovers are permitted;
Roll over the assets into an IRA;
or cash out the account value.
What you choose to do depends on your own personal situation, and the quality of your old and new plan. You should seek professional advice to determine this. The last option is usually the worst since you will pay a 10% penalty in addition to your current tax rate. This could mean you will lose 50% of the funds to the tax man. Ouch!!