Retirement 401k to Roth IRA Roll-Over
You can roll-over a portion of your 401k in a Roth IRA and a portion into a Traditional IRA or all of it into a Roth IRA or Traditional IRA. A traditional IRA is similar to a 401k in that it is also tax-deferred (which means you would be able to reduce your current taxable income, but you'll be taxed when you take withdrawals). Therefore, the initial tax implications are fewer than that of if you were to roll directly into a Roth IRA.
How much should I allocate to Roth IRA versus Traditional IRA?
You will have to consider your current and future income sources and whether or not you would expect to more taxes now or more taxes later. If you expect to pay more taxes later than I would allocate more to a Roth IRA, which allows you to pay taxes upfront and then your withdrawals will be tax free. Alternatively, if you believe you will pay more taxes later on, I'd lean towards the Traditional IRA. Of course part of your future tax rates depend on whether or not the government will reduce or raise taxes.
What are the general tax implications?
Because you are rolling from a tax-deferred 401k, to a Roth IRA (which is after tax contributions) there are certain tax implications you need to consider.
Namely, the fact that you will have to pay income tax on the amount rolled to the Roth IRA. If possible, it is advantageous to use funds outside of your 401k/Roth IRA to pay the tax because that way you will be able to grow your funds within the fund versus drawing from your contributions. Furthermore, if you take money out of your fund before 59 and a half you will be penalized.
How do I roll it over to an IRA?
Some companies will not provide the option to roll-over to an Traditional IRA or Roth IRA via their plan administrator, therefore you will need to go through an IRA plan administrator. These include Vanguard and T. Rowe Price. Specifically through Vanguard's 'Open Account' site, you will have the option to roll-over to an IRA.
After you've completed the steps, it will ask that you have the 401k administrator transfer the fund or write a check to the IRA administrator. A direct distribution, whereby funds are sent from the 401k directly to the IRA without you touching the money, is definitely highly recommended as this simplifies the paperwork and reduces further tax implications.
Finally, you'll need to find out what you need to provide to your former employer to complete the process. As this information is specific to each 401k administrator, my suggestion is to call your former employer's plan administrator.