Morning Kelly,
I forget your age Kelly, but when you reach retirement age, you should be able to start taking money from the IRA (If you roll it) at that time with no penalty.

The penalties are pretty bad when you take it out early. I think its something like 15% tax with a 10% penalty. HOWEVER, I did this last year when I was not working and because I had lots of deductions to take, the hit was not that bad. (I ended up getting $500 back this year, but took out $7500 from my account)

Another thought for you is this. Do you own your home? If you rolled your IRA and forgot about it, then your home would be the way to go to get extra cash should you need it. They (Mortgage Co) litterally give you access to thousands of dollars should you need it. Yes you have to make payments, but it is an option.

Keeping an IRA until you retire could prove to be a very good thing. That said, it could also be detrimental if you do not get into safe stocks. Just the past year many have seen their IRA's destroyed by the market. It's a fine line to walk when you invest.

You may want to read the book by "Suze Orem" (SOMETHING LIKE THAT) I think what she would tell you to do is to take that money and pay off your house, or close to it.....so you no longer have to make those payments. Then, you have ALL the equity for the home and can do what I described above.

It's a hard decision to make. Don't be in any hurry. Let the 401(k) sit there until you are SURE what you want to do. Look at all your options!!!

Hope I helped a little bit...
J