Incase employee change the company. It allows you to change the fund to another company 401K account or retirement plans. Incase you want to transfer funds from 401K plan to another company than you must manage the tax-deferred status. The main advantages are you do not needs to pay tax on your account and able to withdraw money.
The withdrawal of the money is depends on the vested amount in your account. If you are below 60 and your vested amount is only $5000 than you must have to keep your amount in your 401K accounts only because any withdrawal will be taxed and penalty.
You can also transfer amount into IRA account or other scheme. In case of financial problem some 401K plans permit us to get the money to get the financial help. You must have to select the plans so that you can get the benefits. If you select the distribution option before 60 years of age than you need to pay 10 percent of penalties.
Finally, you can get withdrawal incase of termination of plans, employments, disability or incase of death. The 401K plans have a provision to give benefits to the beneficiaries.