You can transfer the funds directly into your new 401k , if your new job provides one ,
or into an IRA account at a bank or a brokerage house like E -Trade .
Be sure the funds are a direct transfer from one instution to another
or you will have to pay taxes and a penalty.

You set up an IRA at a bank or investment broker and have your 401K funds rolled into that account. Be sure to have the funds transferred directly to the IRA account. If they get sent to you first, even if you send them on to the IRA account the same day, you will owe taxes on the amount plus a penalty.

I use E-Trade, but any of the discount brokerage companys such as ScottTrade, Charles Schwab or Fidelity will work. Also, if you are going to put the rollover funds into a mutual fund or two, then one of the mutual fund companys such as Vanguard can assist as well. Vanguard is a well known and respected mutual fund company with many investment options.

Where to transfer a 401 K isn't as complicated as it sounds, but there a few pitfalls to avoid. It's best to tell your previous employer's HR department what company you want the plan transferred to, either a new employers 401 K or an IRA with a broker. This will reduce the chance for tax penalties and reduce your paperwork hassles.

I would recommend a large fund holding company like Vanguard or Fidelity for an IRA. A stock brokerage firm will just act as an intermediary with some mutual fund and you will just end up paying more fees and get more paper work in return for nothing except the promise of a little more hand holding. Even if you do nothing with your 401 K after transferring it to a brokerage firm, they will charge you something each year, sometimes substantially, for all the junk mail they send you. In addition, they will probably push one of their own in house "proprietary" funds which will have above average fees and probably have a poor performance record compared to other fund choices. At least that was my experience.

The large mutual funds have reps. who are very helpful and patient and will guide you through the process of doing a 401 K rollover into another plan and go over the fund choices based on your objectives. Call a couple of them and decide who you like before telling your old employer where to transfer the plan.

If your current plan accidentally sends your 401 K money directly to you, you could get hit with a big penalty unless you get that money into another plan within 60 days. Then you will have to send the IRS documentation that you did so which just adds to the hassles.

Good luck and thanks for the good question.

Brokages, banks, mutual funds and many other financial institution offer IRA accounts that accept 401K rollover. It depends your financail expertise to where. Generally, for an average person, it is better to roll the 401K over to a low fee and good performance reputable mutual fund company, such Vanguard and T Rowe Price. You can simple invest in the target retirement funds.