Things to consider before rolling over an IRA
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Vanguard's Kinniry says picking a good fund family is probably the most important consideration.

"We think a fund family that ranks in the top third or top quarter on 10-year performance rankings along all product lines is probably a good place to start," he says.

No matter what decision you make, Peterson advises that you do your homework. "You have to know what you are investing in. Otherwise your money will be eaten up by fees, market turndowns and bad choices," she says.

Also, be sure to have an investment plan. "If you're going to be moving money into a new IRA, ideally you should have some plan of what you're going to invest in once the money gets there," says Kitces.

Letting the money just sit around in a money market fund is a mistake people make when they don't have an investment plan.

Ideally you should follow an asset allocation plan that's appropriate to your age, risk tolerance and time horizon. A diversified portfolio will expose you to less risk in the long run. Make sure you take into account the asset classes represented in other investment vehicles you currently own and avoid duplicate product offerings.

"One of the biggest mistakes I see is that people have money at different financial institutions. But if you actually look at what they own, you might see a huge overlap," says Lange.

Always name a beneficiary
Many people are under the false impression that if they name beneficiaries in a will, they can rest assured that their IRA will be passed on according to their wishes.

"This mistake is deadly and all too common," Lange notes in his book, "Retire Secure."

The reason, he says, is that the will or trust does not control the destiny of retirement plan assets. Beneficiary designations do. But if none is named, there is a default destination for the assets.

"I just had a case where a person who worked for a big company died in his 40s, had $400,000 in his retirement account and no beneficiary," Slott says. "All of it went to the estate."

From there the assets go through probate. Investment contracts with beneficiary designations automatically bypass the probate process.

Pinnacle Advisory Group's Kitces adds that you should have a contingent beneficiary as well. A contingent beneficiary could be a trust, a child or your grandchildren. He says if you are uncertain about who to name, get help.

"If you have any estate planning documents already in place like wills or trusts, call your attorney and ask him to tell you how you should word your beneficiary designation," Kitces says, so that it conforms with your estate plan.

As indicated earlier in this story, your beneficiaries can take advantage of the ability to spread out payments over their lifetimes. But unless you tell them about it, they may never find out on their own. Advise your nonspouse beneficiaries that upon your death, they will need to roll over your IRA into a properly titled "inherited IRA" with your name on it. And let your estate planning attorney know that you'd like this done for your beneficiaries.

Otherwise, if your children cash out your IRA, the proceeds of the lump sum will be subject to tax, which will instantly diminish their wealth as well as your past efforts to build a fortune.