Whether you’ve changed jobs or simply want more control over your investments, most of us have been faced with rolling over an old 401(k). Before you move, there are several things you need to know. First, you have a choice: roll over into an IRA, roll over into a new 401(k), or cash it out.

(Withdrawing money is generally not a good idea, because you’ll pay taxes and penalties – and decimate your retirement savings!)

But there are a few other factors to consider. I took the plunge myself and rolled an old 401(k) into my IRA, and it made me realize that there were quite a few pitfalls to avoid in the process. Before you move your money, here are some factors to consider.

Beware of fees

These small administrative, investment, advisory and other expenses can add up faster than expected. Compare fees between the two accounts to ensure that deferring your investments won’t cost you more.

In general, 401(k) fees tend to be between 0.20% and 5%, while IRA fees tend to be lower. ($0 in many cases!) But even a slight percentage difference can have a significant impact on your long-term savings.

Let’s look at the difference fees can make for a 25 year old with an average annual contribution of $20,000 and a 7% annual rate of return. At age 65, this is what their account balance would look like with fees of 0.25%, 0.50%, and 1.00%:

Data source: Author’s calculations.

A difference in fees of just half a percent can cost you $554,828 over the course of your retirement savings.

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Avoid a taxable event

One of the biggest concerns I had when rolling over my 401(k) was whether it would create a taxable event. A taxable event is any financial transaction, such as the sale of an asset or withdrawal of funds, that triggers a tax liability, meaning you will have to pay taxes on the growth.

The good news is that as long as you roll over an old 401(k) directly into an IRA or new 401(k), you won’t create a tax liability. Just make sure to do a direct rollover where funds are transferred directly from one account to another.

If the check is made out to you and you then deposit it into your 401(k) or IRA, this could trigger mandatory withholding for taxes. A direct rollover (where one retirement account provider sends funds directly to the other retirement account provider) avoids this hassle.

Another important consideration is the tools and resources offered by your current employer (or IRA) compared to your old plan. Tools like retirement calculators, market research, and educational content can help you make smarter decisions about your retirement. If these are important to you, make sure the plan you’re rolling over offers the same or more robust tools.

Consider Your Investment Options

Pay attention to the types of stocks and investment options each plan offers. Some 401(k) plans have limited options, while others may give you access to a wider variety. And, if your new 401(k) doesn’t offer the investments you want, switching to an IRA can give you more freedom. IRAs generally offer a wider range of investment choices, including access to individual stocks, high-interest CDs, bonds and ETFs.

Plan your turnaround correctly

If you’ve just started a new job, it may be a good idea to wait until you’re settled in before rolling over your 401(k). If you are expecting a match or bonus from the employer, it is best to wait until these funds are dispersed before rolling over the account.

Avoid rolling over your funds when the market is particularly volatile. If the market rebounds sharply while your funds are in transit, you could miss out on potential gains. On the other hand, rolling over when the market is down could be a good thing because you’ll be able to buy more shares at a lower cost.

By paying attention to fees, avoiding taxable events and considering your investment options, you can ensure your retirement funds continue to grow. Take the time to compare your choices and carefully plan your transfer: your retirement savings will thank you.