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    bassethound3's Avatar
    bassethound3 Posts: 2, Reputation: 1
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    #1

    Apr 14, 2009, 08:30 AM
    Penalties for closing 401k early
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    How severe would penalty be for closing out 401k early? 38 years old...
    ebaines's Avatar
    ebaines Posts: 12,131, Reputation: 1307
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    #2

    Apr 14, 2009, 11:57 AM

    You would pay income tax on the distribution (federal as well as state/locality, depending on where you live) and also an extra 10% early withdrawal penalty. Depending on your circumstance, this could mean you'd be left over with only about 55% of the withdrawal.

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