When switching jobs, don’t risk your retirement by cashing out your old 401(k).

The promise of quick and easy cash via 401(k) accounts proves tempting for many job-changers. According to Hewitt Associates, nearly half of employees opt to cash out their 401(k)s when leaving jobs.

But smart financial planning doesn’t always mean you should follow the herd. That alluring chunk of money comes with costly strings attached. A little simple math quickly demonstrates the folly of impatience:

Let’s say you have $50,000 in your 401(k) account. Subtracting the 10 percent early withdrawal penalty you’ll owe the IRS ($5,000) and the roughly 30% in state and federal income taxes (about $15,000) and you’re left with a measly $30,000. Salt in the wound: you also lose all of the tax-deferred growth on that $50K.

So tempting as it may be to fund that home renovation or trip around the world, keep your mitts off that money.

There are three ways you can keep your 401(k) contributions invested:

1. Leave it where it is. As long as you have at least $5,000 in your account, you can usually leave it to grow in your former employer’s plan.
2. Bring it to your new employer. Most plans allow you to roll your 401(k) plan from one employer to the next. Ask your human resources department whether you’re eligible and for the necessary paperwork to complete the transfer.
3. Roll it into an IRA. Instead of your employer, you manage an individual retirement account (IRA) via your chosen investment firm, while reaping the same tax benefits as you grow that retirement nest egg.

Which is the best choice? For more flexibility over the long haul, IRA accounts are the way to go. To get started, select a mutual fund company or brokerage service offering the best range of investment options, lowest costs, responsive customer service and online account access.

When you’re ready to move your 401(k) to an IRA, be sure to request a direct rollover, where your money is transferred directly from your 401(k) to your IRA. Having your former employer’s plan cut you a check for deposit into your IRA means getting hit with a whopping 20 percent withholding tax.

Once you’ve made all the right moves, don’t blow your hard work by investing impulsively; build that comfy retirement by sticking with long-term investments.