10 Biggest Retirement Mistakes: #2. Taking A 401(k) Check

If you decide to transfer your 401(k) or other retirement assets to an IRA, make sure they go directly to the new custodian.

If your employer cuts you a check, the company will be required to withhold 20% for taxes and you will have to roll the entire amount — including the 20% you didn't receive — into an IRA within 60 days.

Any money not deposited into the IRA would be treated as a taxable distribution, subject to taxes and early-withdrawal penalties.