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An expert will surely answer your question completely, but here's my layman's explanation:

1. Roll over the account directly to the brokerage to a traditional IRA so the 401(k) company doesn't have to hold money for taxes.

2. The only advantage to rolling it over into a new traditional IRA is that these rollover funds will be isolated and, should you choose to, can be re-rolled back into a 401(k) with a future employer. It seems to me why would you ever roll an IRA back to a 401(k), but I went ahead and did this route during my last rollover.


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