Posts Tagged ‘cash 401k’

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.
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