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What do I need to know about closing my 401-K?

I would like to cash in my 401-K.

asked by austingirl (17)

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Tags:  investing  legal

answers

If you cash out the 401K without rolling into an IRA or another 401K, you will owe income taxes and a 10% penalty.

6 votes

There are substantial penalties for doing this. Not only will you lose some of your invested money directly, but the tax consequences are very dire. It is almost never a good idea to cash out a 401(k) prematurely. Many 401(k)s will let you get a loan from the balance, which is almost always cheaper.

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posted by John (7928)
4 votes

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