If you don't want to leave it you can roll it into a traditional IRA without paying taxes. Do not, repeat do not leave your fingerprints on the funds but have the trustee of your new plan get the money from the old plan.
Any of the main discount brokerage firms (Scottrade, TD Ameritrade, E-Trade, so on) can serve investors well with retirement plan rollovers at relatively low cost. You'd first establish an IRA with a firm and then arrange for your 401(k) to be directly rolled in. The plan administrator for your 401(k) will have their own forms for authorizing so you'll want to contact HR at your former employer. Ask for "distribution forms to make a direct rollover to an IRA at another institution." Whether a Traditional IRA or Roth IRA is better for you depends on your/spouse's current and future tax picture and need for a split in taxable/tax-free retirement assets. If you convert your rollover funds to a Roth IRA, then those funds will be taxable income for the year of conversion. Generally speaking, folks who are in a higher tax bracket now than they anticipate in retirement will usually benefit more from tax-deduction now to 401(k) and Traditional IRA. (So if that's your case, it may not be best for you to convert to Roth at this point.) Folks who are in a lower tax bracket now than they anticipate in retirement will usually benefit more from foregoing the tax breaks now, contributing to a Roth, and then paying no tax on that money when withdrawn in retirement. (If that's your case, it might make sense to do the Roth conversion and go ahead and claim the taxable income now.) What's best for you will depend on the specifics of your situation. I hope that helps. All the best!
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