I work at a college and am considering leaving the college to start my own small business. I have a 403(B) with funds invested in Fidelity and an SRA with funds invested in TIAA/CREF. I would like to take some of the funds upon my termination to cover my salary for a year, pay my health insurance costs until I am settled in business.

Is there a way I could work this to avoid the penalties associated with early withdrawl? The balance of the funds I would roll over into another retirement vehicle, but I'm not sure which kind would be best. Any suggestions.

I can think of three possible options:
1) Simple withdrawl .... take your lumps
2) Loan (Unlikely.... most plans will not allow loan after termination of employment)
3) Substantially equal payments until age 59 and a half .... I think the amount should be roughly the same as a life annuity would provide .... again not really a great option unless you are close to age 59

Side comment: I'd leave the balance where it is. I see no great advantage in a roll over