What happens to your 401(k) when you change jobs? No matter the reason, when you leave your job you have decisions to make, including what to do with your money saved in your employer retirement plan. Understanding your options is a great place to start.

Leave your 401(k).

If your previous employer permits, you may leave your 401(k) account as is, even after you move on. Benefits of doing so may include avoiding any immediate tax consequences and a continued retirement investment strategy. But keep in mind, you won't be able to make any new contributions to this account.

Move your 401(k).

You can continue building your account by rolling over your previous 401(k) to your new 401(k) offered by your new employer, if allowed. This may help prevent any tax hit, and can offer new investment options. Consolidating your 401(k) funds in one place may also be easier to manage.

Rollover your 401(k) to an IRA.

It's your money and you have the option to move it to an IRA. This allows your money to grow on a tax-deferred basis with a wide variety of investment options including stocks, bonds and mutual funds.

Cash out your 401(k).

It's your money, but if you take it out before the age of 59½, you'll owe federal income taxes, plus any applicable state and local taxes. Additionally, you will likely be charged 10% penalty for early withdrawal and reduce the amount you'll want for retirement.

Which of these options is right for you? There's not one "right" answer for everyone. You will have to consider several factors, and you'll certainly want to consult your tax professional and financial advisor before making any decision.

Edward Jones, its employees and financial advisors cannot provide tax or legal advice. You should consult your attorney or qualified tax advisor regarding your situation. This content should not be depended upon for other than broadly informational purposes. Specific questions should be referred to a qualified tax professional.