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.
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Federal
Withholding
Most often the money held in a 401k consists of pre-tax contributions.
Because this money has never been taxed, the federal
goverment
requires that distributions from retirement accounts have taxes
withheld. Your personal tax rate doesn't matter in
determining
the amount withheld--funds are automatically withheld at the rate of
20% of the distribution.
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