A wiser move is to roll the entire amount from the 401K to an IRA and then take distributions as needed so you can spread the tax liability over more than one tax year.

Just a note:  Age 55 if laid off, not 59.5.

SweetieJean do you know if there is a one time exemption for people age 55 or older for withdrawing from the 401k?

Only if you left that employment at age 55 or more.

<a rel="nofollow" target="_blank" href="https://www.irs.gov/taxtopics/tc558.html">https://www.irs.gov/taxtopics/tc558.html</a>

And it's only an exception to the 10% early withdrawal penalty.  You are over 59 1/2 so there is no penalty at all.  Any 401K withdrawal is 100% taxable (unless it is a ROTH 401k) and will add to your other income so it might push you into a higher tax bracket.  Be careful.

VolvoGirl thank you... I didn't realize about the higher taxes bracket

Any increase in income can sometimes also lower certain deductions and credits, and make more of your Social Security benefits taxable..
<a rel="nofollow" target="_blank" href="http://fairmark.com/general-taxation/reference-room/2016-tax-rate-schedules/">http://fairmark.com/ge...>

Thus  my warning to roll the distribution to an IRA and withdraw as needed to contain the damage. Think before you do because it can cost you dearly.