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If I currently have a 401(k) plan and wish to transfer a good amount of these funds (at least 100k) to an IRA account, how do I do so w/o getting a tax penalty for early withdrawal? Is a "direct rollover" a possibility? If so, what exactly does that mean?

First thing's first. You can't roll over a 401k without leaving the job that you currently have the 401k with. In other words, you would have to quit, get fired, or get another job with a different company to do anything with the 401k. Assuming this has already happened, you will need to get the proper paperwork from the Human Resources dept. (or whatever your company calls it).

It is a "direct rollover". You are simply transferring the money from one tax-deferred account to another. You never handle any of the funds yourself (if you do, something went wrong). What you need to do is to contact a company that you want to set up the IRA with (E*Trade/Dreyfus/etc.) and set up a new (unfunded) IRA. Then, fill out the paperwork directing the 401k handler to directly rollover the money to the new IRA account. No money should be sent to you, it should go from Company A to Company B. Hope that helps!

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