You may withdraw penalty-free from a 401(k) if you separate from service at 55 or later. This may make the rolling to any IRA not a good idea.
You can withdraw penalty free if you are disabled.
You can withdraw penalty free if you take the withdrawal using a process called Section 72t which basically means a steady withdrawal for either 5 years or until age 59-1/2 whichever is second.
Aside from these exceptions, the concept is to be allowed to take withdrawals after 59-1/2, but you must start to take withdrawals starting at 70-1/2. These are called RMDs (required minimum distributions) and represent a small fraction of the account, 1/27.4 at 70, 1/18.7 at 80, 1/11.4 at 90.
Each year, you take a minimum of this fraction of the account value and pay the tax. If you had a million dollars, your first withdrawal would be $36,496, you'd be in the 15% marginal rate with this income.
In general, it's always a good idea to be aware of your marginal tax rate. For example, a married filing joint couple would be in the 15% bracket up to a taxable $74,900 in 2015. At withdrawal time, and as the year moves along, if they are on track to have a taxable $64,900 (for example), it would be wise to take the extra $10,000, either as a withdrawal to put aside for the next year, or as a Roth conversion. This way, as the RMDs increase, they have a reduced chance to push the couple to the next tax bracket.