Leave Your Job/ Retire? What Are Your 401k Plan Options

A "Rollover IRA" is the name given to an IRA that holds money from a retirement account like 401ks or a 403b. Money from an employer's plan can be rolled over into a Traditional IRA. In certain situations a Traditional IRA may later be converted into a Roth IRA.
IRS Compliant IRA Rollover

You have a few options with your 401k plan from a former employer. In almost all cases, a transfer to an IRA Rollover account is the best option for wise investors. For long term retirement security it is imperative to have a sound savings plan such as an IRA and control and flexibility are key to ensuring financial success. Included in your choices are these options:

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You can transfer the money into a Traditional IRA or IRA Rollover account - these accounts offer the same tax deferred status as 401k plans but offer you more flexibility and control of your investment options. If the you opt for a Traditional IRA, you can also continue to contribute up to the annual limit.

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You could leave the money where it is - one drawback of this method as that you must rely on your former employer for account management

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You can pay a penalty, take the money out, and spend it. This option is strongly advised against as you would be subject to both the 10% IRS withdrawal penalty (up to age 59 1/2) and the withdrawal would be taxed as ordinary income