I usually recommend you roll your 401K into an IRA when you leave a company. The key word here is USUALLY. There may be a situaltion when using the 55 and older exemption may make sense. See this article in SmartMoney by Bill Bischoff:
http://www.smartmoney.com/taxes/income/when-ira-rollovers-go-wrong-1343243259709/
Everyone’s situation is different but this might be a case where you can avoid the penalties for early withdrawal by using this exclusion if you will need some of the money before you turn 59 and a half. Call or email me and we can discuss it.
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email bstonercpa@sbcglobal.net phone 818-317-6035