The average worker no longer spends a lifetime with a single employer. That raises a dilemma when you do leave a job: What to do with your 401(k)?

New estimates from Hewitt Associates, a human resources consulting firm, suggest that 46 percent of people spend their 401(k) when they move on from an employer. Of course, you always have the option to just leave it with the old employer's plan or roll it over to your new employer's plan.

If you do choose to cash out your 401(k), know that you'll typically get hit with taxes and penalties that can eat up some 40 percent of your money.

For example, if you take a 401(k) with $10,000 in it and cash it out, you get a tax bill for 20 percent upfront. Then when you file your tax return the following year, you get hit with another 20 percent in taxes and penalties.

That means your $10,000 becomes more like $6,000 and you have zero saved for retirement. Very bad math.

Remember, cashing out an old 401(k) should only be a last resort when you exhaust all other sources of money to live on.

But if you need to get at that money, the smart way is to have it rolled over to an IRA and only draw what you need to live. That way you can reduce the tax and penalties you'll face.