You have three options:

  1. Leave it where it is. It can stay there until you retire. But the company will no longer be contributing to it and neither will you. The company doesn't mind keeping it because it helps their overall portfolio. However, as time passes and you become more removed from them, it will be harder to arrange your 401K's departure from their coffers.

  2. Cash it out. Sure, you can turn it into cash. But first, you pay a 20 percent penalty for cashing it out early and then the government taxes you on the part that's left. Some deal, eh?

  3. Roll it over. This is your best option. You can roll it over into a personal 401K or one with your new employer. Either way is fine, it's up to you.

SoYouWanna know more? Check out our full-length article SYW resign from your job?