You can start contributing to your new employer plan and allow the money in your old 401(k) plan to grow.
This makes sense when your new 401(k) has lower fees and better investment options than your previous employer’s 401(k) plan.
If the IRA has lower fees and access to better investment opportunities, this move makes sense.
If you are 59 ½ and above, you can take qualified distributions from your 401(k) without being charged a 10% early penalty fee.
If you cash out before age 59 ½, you’ll have to pay income tax on the full balance plus a 10% penalty on the withdrawal and relevant state tax if applicable.