If You Cash a 401k Out Early What is the Penalty?
February 4th, 2012
There is a lot to know about how cashing out a 401k works, but the big issue here is that there is an early withdrawal 401k penalty. This penalty is ten percent of what you withdraw from your account. That might not seem like much, but think about how long it took you to save up that much, and how much money that could have earned you on returns from your investments between now and the time that you retire. That’s a lot of money to lose for your retirement, and while a lot of peopel think they’ll have time to make it up later, it’s extremely rare for anyone to ever actually do that. You need to make your retirement savings a priority if you actually want to retire.
Entry Filed under: Finance