Are you changing jobs? Here’s why you might want to convert your retirement savings to an IRA instead of your new employer’s 401(k).

Whenever you leave your job, it’s a good idea to take the money you have in your previous employer’s 401(k) and move it into a new retirement plan. You may have the option to leave the money where it is, but that doesn’t make much sense.

After all, why would you entrust your hard-earned retirement savings to a plan sponsored by a company you no longer belong to? Plus, if you leave money in an old 401(k), you run the risk of forgetting about it.

Now you may be considering moving your old 401(k) to a 401(k) plan offered by your new employer. In and of itself, it’s not a terrible idea. However, here are some reasons you might want to consider an IRA instead:

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1. You get more investment choices.

One of the main problems with 401(k) plans is that they tend to limit your investment options. There may be dozens of funds to choose from, but some of them, especially mutual funds, can be expensive.

The great thing about saving for retirement in an IRA is that you can invest your money in individual stocks. Not only will this help you build the cheapest portfolio, but it can also help you build a portfolio that will help you generate greater returns.

2. Nothing matches your new employer’s plans.

A big advantage of saving for retirement in a 401(k) plan is that it eliminates employer matching. However, if your new employer does not have this benefit, an IRA may be a better option.

In addition to the investment-related fees you may face in a 401(k), you may also see costly management fees. So, if you don’t benefit from an employer match, choosing an IRA may come at a cost, and administrative costs may not be equally high with an IRA.

3. Your new employer has a poor vesting schedule for your 401(k).

Anytime you change jobs, there’s always a chance that your new role won’t work out for you, or that after a while, you’ll decide to move on. However, this can present a difficult situation from a 401(k) planning perspective.

Some employers impose a vesting schedule to earn ownership of a 401(k) match. And while some vesting schedules are progressive, allowing you to vest partially over a period of time, others may leave you with no portion of your match remaining at all unless you remain an employee for a preset period of time.

Here’s an example: Let’s say your new employer’s plan has a strict vesting schedule where you have to remain employed for three years to be matched or you get nothing. In today’s workforce, depending on the role and industry, three years can be considered a long time to stay in one position. So in this case, it may be better to stick with an IRA to expand your investment choices and lower fees. Because matching may not happen.

To be clear, the vesting schedule does not apply to funds you contribute to a 401(k) from your salary. This only applies to money your employer can put into your account.

It’s definitely a good idea to take retirement savings out of your traditional 401(k) when you leave your job. But don’t assume that your new employer’s 401(k) is the best place to get that money. You may find that an IRA makes more sense for a variety of reasons.