Cash 401k

So you want to cash out your 401k? Do you really think you can’t live without it? I mean truly, because you’re only gonna get about 60% of what your balance is. You need to think of the following consequences if you do decide to cash it out now:

1. You will pay a 10% penalty if your are under 59 and 1/2
2. You will pay Federal taxes if you were investing pre-tax
3. You will pay state taxes if you were investing pre-tax
4. You will lose the potential earnings if you left it alone: For example, a 10,000 investment left alone for 30 years would net you a cool $150,000 if left alone (assuming a measly 7-8% interest)

Remember, you do have the option to do a rollover if you left jobs or were fired.
Check out some more of my articles by subject (search tab) or to the right in the categories. Thanks for reading this!


Tagged as:

Leave a Response

You must be logged in to post a comment.