For example, if you have $50,000 in your 401(k) now, taking out $5,000 may not seem like too big of an impact. But that $5,000 distribution could mean missing out on about $16,000 in additional savings 20 years down the road. Penalty-free exceptions for cashing out a 401(k)...
Avoid Cashing Out Cashing out your account, in whole or in part—whether the account is traditional or Roth—is usually a mistake. On a traditional 401(k) plan, you will owe taxes on all of your contributions, plus the 10% for early withdrawals if you are under age 59½. ...
Instead of cashing out, another option would be to convert your account into an IRA so that you have a wider range of investment options to keep your money growing until you need it. What Are My 401(k) Options After Retirement? Generally speaking, retirees with a 401(k) have the ...
For the benefit of other readers I'll first define a non-qualified annuity. That's an annuity purchased with after-tax savings. The IRS calls it non-qualified because the initial investment or premium was not pre-tax money. Pre-tax money would be IRA or 401k accounts, where the cash val...