I was just let go of my job after 10 years of service. My question is can I cash in my 401 K in full without paying any penalties for early withdrawl? I do not plan on rolling it over. I am 57 years old. I do know that I will have to pay taxes on it as it will be added too my annual income.

Thank you

You only have 2 and a half years to wait to get the whole thing, as it is now you pay a tax on the money, and a penalty, and that can add as much a 30% or more, depending on the amount of taxes you are obligated to pay. Roll it over, or leave it a while longer.

You will NOT have to pay the penalty - if you separate service from your employer in the year you reach age 55 or later, your withdrawal from your ex-employer's 401(k) plan can be made without penalty. This only applies to your 401(k) - if you make a withdrawal from an IRA you would owe the 10% penalty.

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No penalty is due if separation from service is at age 55 or older.

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That may be true with some, but mine specifies 59 and a half. I should have stipulated he should talk to his plan provider for the exact terms of his 401k. My bad.

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Originally Posted by icebrevey2

I was just let go of my job after 10 years of service. My question is can I cash in my 401 K in full without paying any penalties for early withdrawl? I do not plan on rolling it over. I am 57 years old. i do know that I will have to pay taxes on it as it will be added too my annual income.

Thank you

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If you were involuntarily terminated by your employer at age 55 or older, you may start penalty-free withdrawals from your 401k with that company.