CarlosKB inquired:
I ask here, is there a standard payout method? lump sum?

Well I will bet the answer is there is no standard way.

In my case, having just retired, I can tell you what choices I was offered cause I would guess that is typical.

When I left work I could continue to leave the money with the fund for as long as I wanted up to age (and this still has me confused some) but I believe it is the year after I turned 70 1/2.

Then it all would have had to been moved.

The reason is at that magic age (and I only found out about this 6-7 months ago) I would then have to start withdrawing funds so I would be required to pay at least some tax, hopefully before I died.

And the rule with the company holding the funds (and I would assume (and you know what they say about assume) all fund holders, is if you withdrawn any money you have to withdraw it all (from the 401K).

At that moment (of withdrawl) you should plan on having it all transfered to a self directed IRA of some form.
(and there may be other ways, but this is what I did).

You are then free to do what you want with it, and assuming you are over 59 1/2 at that time, all withdrawals from the fund are then taxed as income for the purposes of taxes. (pre 59 1/2 there is a 10% penalty tacked on to taxes)

There is no tax on the roll over to a self directed IRA if you do it right, and you never take possesion of the money, but be sure to do it right (and any brokerage I would guess knows how to do it right) cause if you do it wrong, it can get expensive.


So that then gets to the second part of your question about of annuities etc, which would be your choice about how you invest the funds once they are in the self directed IRA.
(and you may want to read some additional articles about annuities as investments that were posted within the last month on this board or the retired fools board, cant remember which and am running out of time for now, chores etc.)

oldred22