Before you get too deep into some of the complexities, let's make sure you have a good understanding of some basic terminology and rules regarding a 401k rollover.

Cash Distribution

This is the most basic way to get money out of your 401k--the company cuts you a check.  If you choose this option you will have federal taxes withheld, may be subject to some early withdrawal penalties, and lose out on your opportunity to grow your money tax deferred..
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