You are wise to want to roll over your 401(k) plan distribution into another type of tax-deferred retirement savings plan instead of spending it. Doing this will preserve its tax-deferred status and avoid immediate taxation on the $15,000. If you plan to get another job, a new employer's 401(k) may be a rollover option. You can also use a rollover IRA to receive this money. Since you are under age 59½, you would otherwise owe a 10% penalty plus ordinary income taxes on the distribution. eXtension does not provide personal investment recommendations, such as specific investment products or company stocks to invest in. Rather, our goal is to provide you with basic information and resources with which to make informed decisions. For information about the process of investing and specific investment products, see Investing for Your Future. We would like your feedback on this Personal Finance Frequently Asked Question.

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