401k rollovers are an important part of keeping track of your money. In this age, people go through jobs almost at the same rate they go through changes of clothing. Statistics have been quoted pertaining to figures ranking as high as eight job changes in a career for a given person coming in or around the Generation X era—now, those eight job changes aren’t just changes within a single company. Those job changes can entail long-distance moves and will certainly entail new company affiliations.

Now, statistics come from various sources (meaning various interpretations), but most people can agree with at least the principle illustrated above. So with that as a background—the job changes—you know that you’ll be rolling your 401(k) over several times during your employment. How do you roll it and where? Well, two of the big questions to ask about 401k rollovers are these: what about transfer penalties? What about employee stock?

When you transfer the funds from your 401(k), it’s not often going to be a wire transfer. Usually, your previous employer will write out a check for you to deposit directly with your new account. This is especially the case in rolling over from one 401(k) to another 401(k). When that is the case, your previous employer will often withhold twenty percent in case you decide not to re-deposit the check into another 401(k) or IRA. If you do not make that deposit into a tax-deferred account within the prescribed time (within sixty days of the withdrawal), the twenty percent will get handed over to the IRS. Once the tax year comes to a close, you will also owe whatever additional tax you would have owed normally on that money.

Generally, though, the number of annual 401k rollovers you can make is unlimited—so while you have to be careful within the year as to how you’re moving your money, from year to year you have lots of options. Now with that in hand, we can go back to another aspect of rolling over your 401(k), that of working within an account-to-account transfer. The thing to keep in mind when working in that scenario is that you need to look out for transfer penalties. These usually aren’t at the same level of penalty associated with taxable withdrawals, but such items as handling fees can apply if you do have the option of wiring the funds. Now, if you don’t plan to make use of 401k rollovers for a while, that may not be a big issue. If, however, you know that it’s only a temporary situation (if, for example, you know that your retirement really is coming up soon), you probably ought to investigate what option works best.

Lastly, in all of this, remember that your 401(k) sometimes includes stock. Often, you won’t want to roll that stock over; leaving it with the parent company means that the overall value of your 401(k) might decrease, but you will still have stock holdings in that original company. At any rate, the key is to look into the company-specific policies when dealing with 401k rollovers.