I know it’s not a good idea to cash out my 401k but I have no choice. Can anyone tell me how hard I will be taxed and is there a way around it. I was told that even nex year I will have a penalty.
10 replies (most recent on top)
If your 59 1/2 years of age, no penalty! 20% federal government and state tax
You will not owe taxes on your 401K if you roll it over into either another 401K plan at another employer or IRA ( available at any financial institution )
it's a 30% total tax
Do a loan on it
You will be taxed at the tax bracket the $$ amount of your 401k. Plus you will pay 10% penalty for early withdrawal. If you turn 55 the year you withdraw it there is no penalty.
Hardship reasons , such as mortgage, no 10% penalty.
But you will ALWAYS owe the taxes. You have not paid taxes on the 401 money. So even when you retire and withdraw it at an old age you still owe the taxes.
If you are leaving the company, your 401K can stay where it is. You and Walmart will no longer make contributions. If you are getting another job the 401K can be transferred to that employers plan if they have one. If not, I suggest you talk to a Financial Advisor about reinvesting the money. If your reinvest there are no taxes paid or penalties.
If you're not working for them anymore, you can just take it out. If you're still working for them then look into a hardship withdrawal or in service withdrawal or loan.
You will get taxed as income then hit with a 10% penalty
Are you leaving WM/Sam's? You can take a loan against it if you need the money and you plan on staying but you'll have to pay it back. The penalty may not make it worth it but it's your decision.
Just call Meryl lynch that’s their job