Directly transfer or rollover your distribution into an IRA
Directly transferring your distribution to an IRA allows you to avoid the mandatory 20% tax withholding and potential early withdrawal penalties, and you will defer income taxes on the distribution until you make withdrawals from the rollover IRA.
If you choose to directly transfer your retirement plan monies, the assets will move from the qualified employer plan directly to your rollover IRA.
If you choose a lump sum distribution from your employer-sponsored plan you will have 60 days, from the date you receive the funds, to deposit them into a rollover IRA to avoid taxes and penalties.