I am so clueless :confused:
I have a 401k plan with a company that I worked with 3 years ago. I moved and my job now doesn't offer the plan since I am considered part-time. I'm not sure what to do with it since there isn't any money going into it... it is just sitting there losing money right now... I didn't realize that there is so many penalties for taking all the money out.. which by the way, isn't much since they offered it the last year before I moved.
Any suggestions?
Lynette :)

Welcome to AMHD. I believe that there is no penalty if you establish a rollover IRA to a bank or mutual fund or brokerage. 401k rollover penalty free (http://www.essortment.com/all/krollover_rzwy.htm)

No, there's no penality if you do it right. The safest thing to do is decide on a broker and let them tell you how to go about doing it -- they should essentially be able to roll it over for you. I would not suggest a bank as they generally have limited options of what you can do with your IRA, and sometimes it's not the greatest thing. I would find a broker that has like no-fee mutual funds (based on minimum balances and such), and some suggestions would be ETrade, T. Rowe Price, Fidelity or Vanguard. (I'm a bit partial to T. Rowe Price.) Doing it this way, you could have like 100 funds to pick from that don't have fees as long as you stick to their minimums. If you have no clue what you're doing, you can always just get an S&P 500 fund. (T. Rowe Price's index fund is $5000 minimum to open through IRA and $10,000 minimum to avoid maintenance fees.) At Etrade, you actually have a lot more to choose from that will allow lower minimums and such. I have a Dreyfus index fund through them that's only a $750 minimum. Or get one of those target date things. (Like target date 2015 or 2030 or whatever is appropriate.) Talk to the customer service people to get an understanding of how their fees work.

Just as a bank example, my bank only works with 3 fund families and have certain funds w/in those families they prefer. And I don't particularly like any of them.

The foremost important thing, though, is getting it rolled over. It might not earn anything, but it can sit in their cash reserves and give you a bit of time to decide what to do with it. Being in the IRA account, and being in a mutual fund or stock or CD's or whatever the heck you want to do, are two different things.