By Althea Chang, staff writer at MainStreet.comHave you recently been laid off, or left money in 401(k) plans at previous employers? You can move your retirement funds to a rollover IRA, a tax-advantaged individual retirement account you can open yourself, even without an employer. Keep It Growing It may be tempting, but the last thing you want to do is cash out your 401(k), even if you've recently lost your job. You'd be subject to federal, state and local income taxes on the amount plus a 10% early withdrawal penalty. And given the stock market downturn, you'll likely be taking a loss as well. If you roll over your 401(k) into an IRA, however, whether it's through brokerages like Fidelity, Schwab (Stock Quote: SCHW), Vanguard, T. Rowe Price (Stock Quote: TROW) or another reputable firm, your funds will keep growing tax-deferred and you'll benefit from compounded growth over time. To ensure that you won't have to pay taxes when your money changes hands, you'll want to ensure that you don't cash out your 401(k) before you put it in an IRA. So be sure to choose a direct rollover in which your money goes straight from one account to another. You might even have access to free help from a rollover consultant team to help you open your new account. Contact your former employer for necessary account information. Explore Your Options You may be able to keep your 401(k) with your former employer, but beware: Your company may place restrictions on how you can reallocate your assets and they may even charge fees for continuing to hold your account. That's just another reason to roll over your retirement funds into an IRA.