What is the Penalty For Withdrawing From a 401k?
Cashing out a 401K before you reach retirement age has a much heavier penalty than you may think. This will stop most people from deciding to withdraw early, but if you decide you have no other option, there is still more you need to know, for instance, you can’t actually do this any time you want to, you can only withdraw at certain points in your life. First of all, you can of course withdraw from your plan without any problems or penalties once you reach 59 years and 6 months of age. Until then things are a lot more complicated. Before you reach retirement age the only other time you have the choice to cash out is immediately after you have left an employer. Actually, when you leave a job you have four options of what to do with your retirement account. You can switch to your new employers plan, rollover to an IRA, leave the money where it is with your former employer, or you can cash out-but with penalty. Withdrawing early will lose you a lot of money. There is a ten percent early
