The savings you’ve accumulated in your employer-sponsored retirement plan may be your greatest retirement resource. When the time comes to retire, you’ll need to decide how you want that money distributed to you. Even though this decision may be years or even decades away, it’s important to review your options carefully to determine which will be best for you.

Leave your money in your employer's plan, if allowed

This option may be appealing if you are happy with the investment choices the plan has to offer and you want to continue to manage and rebalance the assets in this account. Remember that, the investments you choose should correspond to your financial needs, goals, and risk tolerance.

Take a lump-sum distribution

Some retirees choose to withdraw part or all of their retirement savings at once, then invest it themselves or spend it. Such a move triggers serious tax consequences: The government withholds 20% toward income taxes immediately – and, depending on your income tax bracket, you may have to pay more by April 15. And if you're under age 59 ½  when you take this distribution, you'll be charged a 10% early withdrawal penalty to boot. In one move you may have slashed the amount of money you've saved and possibly damaged your financial prospects for retirement.