If you make your 401K withdrawal in a year when you have on other income, you will still pay the penalty, but the tax bite will be small.Otherwise, leaving the funds in a tax advantaged retirement plan until retirement is a good plan. The best is to move it to an IRA and then convert to a Roth IRA. However, leaving it in the 401K can be OK if its a good plan with acceptable rules, low costs, and good investment choices. Otherwise, chose a Roth IRA custodian that better meets those requirements.Best of luck to you.
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