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Author: aj485 Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 25214  
Subject: Re: What to do with Federal 401K? Date: 11/17/2011 2:40 PM
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What sort of IRA would allow me to withdraw small amounts?

Assuming you are rolling the money to a Traditional IRA, you need to check with the trustee (bank, brokerage, etc.) to see if they have any limitations on the withdrawals that can be made.

Since the withdrawals will be premature (assuming you are under 59 1/2), the trustee will be required to withhold 20% for Federal taxes - not sure if there is a requirement for CA taxes. However, as pointed out upthread, you may owe close to 50% of withdrawal amount in taxes, so be sure to set some of the money aside to make quarterly estimated tax payments and/or pay when you file.

You can read IRS pub 590 for additional details. If you are still taking classes for the bar, you should read this pub to see if some of your education expenses will exempt you from some/all of the 10% penalty.
http://www.irs.gov/pub/irs-pdf/p590.pdf

AJ
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