Disadvantages of reinvesting an IRA: creditor protection risks. You may have credit protection and bankruptcy by leaving your funds in a 401k, since creditor protection varies by state according to IRA rules, lending options are not available. IRAs can be a disaster if not properly managed. The disadvantages include the penalty for early withdrawal and non-payment after age 59 and a half (59) and the highest inflation rate in today's society.
A major disadvantage of an IRA plan is that you cannot withdraw or borrow your funds while you are still working for the company that participates in this tax-advantaged retirement savings plan.