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    lisalynch's Avatar
    lisalynch Posts: 1, Reputation: 1
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    #1

    Oct 18, 2007, 12:55 PM
    401K Cash out
    Does anyone know what the penalties are, if you cash out your 401K
    ebaines's Avatar
    ebaines Posts: 12,131, Reputation: 1307
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    #2

    Oct 19, 2007, 06:20 AM
    If you are under 59-1/2 years of age, and assuming that you don't qualify for a hardship withdrawal under the terms of your plan, you will pay ordinary income tax on any withdrawals you make, plus a 10% penalty. Depending on your tax bracket and state income tax situation, you may end up with only about 50% of the value of your account.

    You would be better off taking a loan from your 401(k) rather than taking a withdrawal.
    Fr_Chuck's Avatar
    Fr_Chuck Posts: 81,301, Reputation: 7692
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    #3

    Oct 19, 2007, 06:25 AM
    ebaines is right on the money ( so to speak) you will pay tax according to your tax bracket ( both state and federal) and the 10 percent actual penalty itself.
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