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How do you know you’re OK with your 401K?

JANESVILLE — If you want to quit working someday, you need a retirement plan.

But many people are getting laid off or starting new jobs in the midst of the country’s economic crisis.

So what should you do with the money in your 401k plan?

When you retire or change jobs, you have several options.

You can put your money in an IRA, roll your money into your new employer’s plan or keep it where it is.

You also could withdraw the money, but you’ll likely pay an early-withdrawal penalty and pay taxes on the income.

Fidelity Investments offers the following tips:

IRAs

Move your 401k money to an IRA if you want:

-- A more complete view of your financial picture.

-- Freedom from restrictions that may be present in your employer’s plan.

-- Access to a range of mutual funds, stocks, bonds, CDs and other investments.

-- The ability to withdraw money for your first home or for education expenses without penalties.

-- More flexible distribution options for beneficiaries.

Rollovers

Put your 401k money in your new employer’s 401k plan if you:

-- Need additional asset protection from creditors.

-- Need a loan from this plan and your employer allows it.

-- Are over age 70½ and want to defer your required distributions.

-- Use custom investment options or managed money services in your plan and those benefits outweigh the benefits of an IRA.

Leave it

Keep your money in your former employer’s plan if you:

-- Stopped working for that employer between age 55 and 59½ and need to withdraw money for an immediate need and don’t want to pay an early withdrawal penalty.

-- Have custom investment options or managed money services in your plan and the benefits of those outweigh the benefits of an IRA.