Rolling the accounts over make it easier to manage.. but with a ‘Roll-over’, you have to be willing to do some of the managing yourself (selection of what to invest in).
Rolling over the 401Ks to a Roth is a different proposition than rolling over to a ‘Rollover 401K’. Roths have the advantage that distributions on earnings from it are not taxed.. with some possible exceptions… but the contributions on a Roth are post tax while a 401K contributions are pre-tax.
401K to Rollover IRA
When you roll over a standard 401K to a roll-over IRA, there are no tax hits. The best way to do it is direct (not taking a distribution and then re-investing within 60 days).
401K to Roth IRA
A roll over of a 401K to a Roth IRA does have a tax hit. The contributions to a 401K are pre-tax, to a Roth they are post-tax. There is a tax adjustment to the amount you roll-over. There are also income tax restrictions. If you have a very low income currently (part time employment, unemployed) the rollover of an 401K to a Roth IRA can be quite effective.
401K for a down on a house
There is a way to use a 401K for a down on the house without getting a full tax hit. I am not certain of the specifics of it.
401K cash out
Doing a straight cash out of a 401K is not recommended. Not only do you get hit with income tax on the amount, potentially moving you into a higher bracket as well, there is also a 10% ‘surcharge’ off the top on the amount.
