Changing jobs and deciding what to do with the money in your current 401(k) plan can feel tricky. Your current employer may allow you to leave it where it is, or you can roll it over into your new company’s employer-sponsored 401(k). Or you can skip employer-sponsored plans altogether and roll over the money into an individual retirement account (IRA).

No single type of retirement plan is right for everyone, making it more important to identify what’s of value to you, as an investor. If you’re wondering about rolling over a 401(k) into an IRA, here are some of the pros and cons worth considering.

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Pro: IRAs offer a wider range of investment options

Most 401(k) plans have an impressive lineup of stock funds but fewer bond options. Considering the primary goal of a 401(k) is to accumulate as much as possible before retirement, this strategy makes perfect sense. However, you may want to shift into a retirement plan with more room for bonds as you approach retirement.

Pro: Greater control over your assets

Generally, an IRA gives you greater control. You can manage your investment mix in a way that makes sense to you. For example, you can choose stocks, bonds, exchange-traded funds (ETFs), and more — whatever it takes to meet your personal goals. While you’ll certainly make some choices with an employer-sponsored 401(k), the options are often less robust.

Pro: IRA fees are often lower

When investing in an employer-sponsored 401(k), you’re essentially a captive investor and must pay any fees associated with your company’s plan. These fees cover various expenses, from administrative fees to investment management fees.

You have no say in who manages your account when enrolled in an employer-sponsored plan. Therefore, you have no say in how much you’ll pay in fees.

However, since you’re the one who decides where to open an IRA and which company will manage it, you’re free to shop around for the lowest fees and keep an eye on those fees to ensure they don’t eat into your profit in an unhealthy way.

Could you pay more in fees for an IRA? Yes, but you have a say in the matter, which isn’t the case with an employer-sponsored 401(k).

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Con: Loss of some creditor protection

In general, 401(k)s offer greater protection from creditors than IRAs. That’s because 401(k)s are governed by the Employee Retirement Income Security Act (ERISA), which provides protections against creditors.

On the other hand, IRAs may be protected if you file for bankruptcy, but state laws differ regarding the other types of claims that may be filed against you. In some states, your IRA may only be partially protected from creditors.

Con: Loss of Net Unrealized Appreciation (NUA)

If your 401(k) includes employer stock, you can use a tax-saving strategy called net unrealized appreciation (NUA) if the stock is distributed as part of a lump-sum distribution.

For example, say your company is doing shockingly well, and the value of its stock has gone through the roof. Because you hold that company stock in an employer-sponsored retirement plan, here’s how NUA would be beneficial at the time of distribution: Rather than pay ordinary income tax on the entire value of the stock, you only pay ordinary income tax on the original purchase price (cost basis).

The appreciation (how much the stock has grown in value since its purchase) is taxed at a far more favorable long-term capital gains rate when it’s sold. On the other hand, NUA doesn’t apply to assets held in an IRA.

There’s no one-size-fits-all answer to whether rolling over a 401(k) to an IRA is the best move. For example, the rollover likely won’t make sense for someone with legitimate debt-collector concerns. But if you like being the captain of your ship, choosing your own broker, and having access to a broader range of investments, an IRA may be just the thing.

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