WHAT IS THE DIFFERENCE BETWEEN A ROLLOVER DISTRIBUTION AND A DIRECT DISTRIBUTION?

A Rollover Distribution lets you transfer your retirement account tax and penalty-free to another retirement account like an IRA, 401(k), 457 or 403(b). A Direct Distribution or “Cash Out” on the other hand allows you to receive a payout from your retirement account, but minimum federal and state tax withholding may apply, as will a 10% IRS early withdrawal penalty for anyone under 59.5 years old.