You want to keep your 401(k) money invested at all times, even when you change jobs. Telling yourself you'll take the money with you and will reinvest it later is a recipe for big bills.

As the graphic at right shows, cashing out your 401(k) will suck a lot out of your hard-earned savings. Your money will be taxed as income the year you withdraw it. You may be subject to a 10 percent early-withdrawal penalty. And you'll lose out on a lot of growth that could have occurred if you hadn't cashed out.

Remedy:

When you leave a company you typically have three options:

• Roll your 401(k) balance into a retirement plan at your new employer, assuming the new employer has agreed to accept the money into its plan
• Roll your 401(k) balance into an IRA if you want access to a broader universe of investments than your employers' retirement plans offer.
• Leave the money in your old employer's 401(k) plan (unless your balance is under $5,000)

If you choose to roll the money over, the smartest and easiest way to do so is what's known as a direct rollover or trustee-to-trustee transfer. That means you never handle the money. Rather you tell your 401(k) provider to send the check to the company housing your new IRA or 401(k).

(Money Magazine's Walter Updegrave has tips on how to decide whether to roll your 401(k) into an IRA or your new company's retirement plan.)