When leaving a company, you have several ways to handle your 401(k): cash out, leave the account where it is, join your new employer's plan, or roll over the assets into a bank or brokerage IRA. Most people take the money and run - but that's by far the worst option. A 1995 Labor Dept. study found that 68% of people over age 40 and 84% of those under 40 fail to roll their retirement funds into another tax-deferred vehicle when they change jobs.

Well before leaving your old job, you should find out whether your new employer has a 401(k) and will accept rollovers. If so, don't just dive into the new plan. Assess all your options, comparing the investment quality and flexibility of each. A well-designed plan offers a broad range of investments - from a conservative money-market fund to a menu of equity and bond funds - and the ability to transfer among them at no cost, says Julie Jason, author of "You & Your 401(k)". It's important to read the plan summary, especially the sections on distributions and hardship withdrawals. Detailed, timely account statements and loan features are also key elements of a good plan.

Like Cabaza, you might find that your old plan offers a hard-to- beat combination of investment diversity, superior customer service, and other attributes. When making your decision, take into account any restrictions the old plan imposes on money left behind. "The rules will vary enormously," says Rich Koski, a principal at Buck Consultants in Secaucus, N.J. "Some companies will charge you an administrative fee or restrict your access to the account and any new investment options."

One situation in which you might want to stay with the old 401(k) is if you have an outstanding loan against it and your former employer will let you continue repayment after you leave. However, most companies require that the loan be repaid in full immediately upon termination*, so it's a good idea to investigate other repay- ment options well in advance. If you are unable to pay off the loan, the outstanding balance will be deducted from your account and subject to tax and penalty.

Now that 401(k) plans have been around for nearly two decades, participants who contribute regularly are astonished by how much they have managed to save. So if you change jobs and don't carefully consider how to handle your 401(k) money, you could be setting yourself up for a costly mistake.

*The SIP does not.