401(k)'s have been hit recently with a withdrawal freeze. Many funds, even If they appear stable, are suffering from a lack of funds to pay out withdrawals. Particularly funds tied to the real estate market have had to put in place withdrawal freezes for the moment.

They are correct.. It has always been this way.. to withdraw from a 401(k) a distributable event must occur...
these are separation of employment, (you no longer work there), you reach retirement age (usually 59 1/2) Or you are permanently disabled. If none of these has happened, you cannot close the account or withdraw.
Loans are an option.. (no tax penalty) but most plans also allow for hardship withdrawal (not all.. they don't have to), you would need to send them bills documenting the need, and there are only 5-6 IRS approved reasons.. (eviction, foreclosure, unpaid medical bills, college tuition, funeral expenses, and casualty loss repairs to your home)
The administrator or your HR can tell you if this is allowed. The regulations make it difficult to withdraw because the money was meant for retirement, and the taxes and penalties are heavy before 59 1/2.....

You have to remember that 401(k)s are retirement plans. You are not supposed to touch that money until you retire. There are special cases where you can take the money out but there are tax penalties to make that possibility undesirable. You can borrow money from the 401 (k) but have to pay it back within 5 years or have tax penalties. After age 59 1/2 you can withdraw money without penalties, but it is considered as ordinary income. Also at at 70 1/2 you are force to withdraw money every year (minimum required distribution) unless you are still working at the same company.

But what if are about to retire at 65. How do you receive what's yours ? Little by little ? All at once ?

To withdraw your 401K completely, you will incur a significant tax penalty. You most likely will not be able to participate in the 401K distributions for awhile as well (often up to one year) depending on the employer.

My advice is to take a loan distribution from your 401K and pay yourself back with interest spread out over your paychecks for a certain time period.

If you are nearing retirement and are weighing the pros and conss of withdrawing it all at once versus payments over time, it's really a personal preference.

I found this site helpful:

http://www.themoneyalert.com/havingaccesstoyourfut ure.html

Let's say you are old enough to withdrawal your 401k then you are over 59 and one half years old. In that case you can get a lump sum payment of your 401k account minus the 20% taxes due on it. If you are under the 59 and one half age limit then the only option for you is to take a loan on the money if you are still employed however watch out. If you get laid off with that loan outstanding then it is due in full.