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Assuming you don't plan on withdrawing the funds for spending needs, then you should have the funds directly rolled over from the 401(k) to an IRA in order to continue tax deferral on the assets. You can open an IRA at a bank, insurance company, or investment firm. Depending on the institution that you open the account with, you may have the option of investing in CDs, stocks, bonds, mutual funds or an annuity.
The 401(k) plan will provide you with the the forms to complete to elect the rollover and there will be a section for you to provide the IRA account information.