In my experience there is a 20% mandatory withholding on distributions from a 401k. The only way around this is to do a direct rollover of your 401k to an IRA. Please let me know if you have any questions.

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When I received money from my 401k recently they did not withhold money for the IRS, they actually suggested to me a certain amount to keep aside for my taxes at the end of the year. However, every administrator may be different.