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401(k) withdrawals: Rules you should know before cashing out — and how to avoid penalties (Ariel Skelley via Getty Images) Your retirement account is a reflection of your hard work over the years.
Cashing out a 401(k) is popular, but not so smart Intellectually, consumers know that cashing out retirement accounts isn’t a smart move. But plenty of people do it anyway.
Considering cashing out a 401(k)? You must consider the tax implications, penalties, and opportunity cost of distributing the entire account.
Plainly put, “Cashing out of the 401(k) before 59-½ is one of the most expensive things a person can do, both from a tax perspective and an investment perspective,” said certified financial ...
Cashing out your 401(k) plan before age 59 ½ means the withdrawal will typically be subject to a 10 percent IRS penalty, on top of the income tax owed on the distribution. And while many plans ...
Continue reading → The post Cashing Out a 401(k) After Leaving a Job appeared first on SmartAsset Blog. The IRS established the 401(k) as a tax-advantaged plan for employees, rather than the ...
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