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It depends on what type of retirement plant it is. If the contributions were made pretax like 401K or IRA than the distribution will be taxable, regardless how it is distributed, lump sum or periodic payments.
If the contributions were made after tax like Roth IRA, than the distribution will be tax free.
Most employer sponsored retirement plans are pretax. Very few employees pick up aftertax contribution like Roth 401K. If it is an IRA, the administrator of the plan should be able to tell you how much of the money are pretax and how much after tax. If it is IRA, I would also check with your parent tax adviser. Some of the IRA contribution could be nondeductible, which makes it after tax.
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