It's wise to question any recommendations about your retirement account that don't seem to make sense. By Kimberly Lankford, Contributing Editor August 16, 2007 When I left my last employer, I left the money in the company’s 401(k) plan. I'm now being told by a financial adviser that, upon retirement, I'll be required to take a lump-sum distribution. Is this true, or is the adviser just trying to get me to transfer this account for the commissions he would earn from a six figure sum?You are right to be suspicious, and you may be on to something about the commissions. Generally, the only time you can be required to take the money out of your 401(k) is if you leave your job with less than $5,000 in your account. But even in that case, you can roll the money over to an IRA without a tax bill. In fact, employers must now roll the money over into an IRA automatically if you have from $1,000 to $5,000 in your account. If you had more than $5,000 in your account when you left your job, and it sounds like you definitely did, then you generally have three choices: You can keep the money in your 401(k), roll it over into an IRA, or transfer the money into a new employer's 401(k), if the new plan accepts transfers. There are a few rare circumstances when employers do require retirees to move money out of the 401(k) at age 62 or 65, but you can always make a tax-free rollover to an IRA. Ask your plan administrator about your 401(k)'s specific rules. Advertisement Even if you can keep the money in the 401(k), you may still want to roll it over into an IRA if you find one with lower fees and better investment choices than your current 401(k). See Don't Leave Your 401(k) Behind for more information about 401(k) rollovers. Whether you keep the money in a 401(k) or roll it over to a traditional IRA, you will have to start taking withdrawals after age 70½, when you'll need to start taking required minimum distributions every year based on your life expectancy. See IRS Publication 590 Individual Retirement Arrangements for more information. If the adviser's advice contradicts your plan administrator's rules, you're wise to question the recommendation. And the advice is particularly suspicious if he was trying to get you to transfer the money to an annuity. But it's not necessarily surprising because annuity salespeople can earn up to 7% of your account balance in commissions for selling variable annuities, and as much as 12% in commissions for selling equity-indexed annuities. With big payouts like that, it's wise to question any recommendations that don't seem to make sense. Got a question? Ask Kim at firstname.lastname@example.org.