Any disadvantage/advantage of rolling 401K over to IRA

[AmericanWannabe]

This is not an immi question but I think here
many are recent job quiters from many
small consulting compnies. These small
companies often vanish. If we don't
take 401K out, they will become
abandoned

[rg585]

The company you work for may vanish but the Companies that manage the 401K plan will not necessarily vanish. These are 2 separate identities. You can tranfer the 401K balance from one company to the next company you join or just leave it in the existing account.
If you are willing to pay a penalty (10% early withdrawal penalty + 20% Federal Tax Withholding), you can encash your 401K when you leave a company.

[Aibolit]

"You can tranfer the 401K balance from one company to the next company you join or just leave it in the existing account."

...and you can roll it over to your own traditional IRA. All of these options are tax free.

[pgcalcutta]

Actually one should always roll over the former employer's 401K to an IRA , the Advantage is you gets lots of choice in the funds and later if you want you can transfer it to after tax IRA ( according to some new tax law ) and you don't have to pay penalty ( but of course tax) , But you can time it correctly , you can rollover some in a bad year when your income is less , also for first time home buyer you can take a penalty free 10K withdraw from your IRA.