"So this mean I ask former company pay the broker (IB) on behalf of me then I can avoid all this trouble?' yes
I just did something similar. Setup the IRA and then roll your 401K over by have the check made out to the brokerage with your account # and then you won't have a penalty or anything.
hjcolvin , Yes I have been thinking of exactly the same thing. I have about 22,000 in my companies 401k and wanted to roll it over into a trader account. Did you find any particular ones you might recommend? I am not at all keen on paying that tax...as well. but want to start daytrading with it. Much obliged, bentnose
Bentnose, I am a OptionsXpress fan and I use them for all of my trading. You should give them a look.
Finally got my former employer send a cashier's check to IB and now the account is fully funded. Thanks to everyone for the help!