If you're asking this question, you probably have a 401(k) or other retirement plan through a former employer. The short answer is yes--most retirement plans allow you to roll your plan funds over into an Individual Retirement Account (IRA) after you've left your employer's service. 

Your best strategy is to do a direct rollover because it will avoid tax consequences and penalties. Another benefit of rolling over to an IRA is that you would be free from the rules and provisions of an employer’s 401(k) plan.

This is a direct transfer of funds from your employer-sponsored plan to your IRA. The administrator of your employer-sponsored plan may send the check right to the trustee of the IRA you have selected. That way, the money never passes through your hands. 

Alternatively, the plan administrator may give the check to you to deliver to the IRA trustee. This also qualifies as a direct rollover as long as the check isn't made payable to you. Instead, it should be made payable to the IRA trustee for your benefit. 

You can roll your distribution into either a traditional IRA or Roth IRA. If you roll the funds over into a Roth IRA (often called a "conversion") you'll include the taxable portion of the distribution in your taxable income in the year you roll the funds over. (A distribution from your retirement plan's Roth account can only be rolled over into a Roth IRA.)

When considering a rollover, to either an IRA or to another employer's retirement plan, you should consider carefully the investment options, fees and expenses. 

Contact a Financial Advisor today to help you walk through the roll-over process.

©2015 Broadridge Investor Communication Solutions, Inc. All rights reserved.