if im drawing unemployment can i withdraw my 401k from my last job also?

Answer 1

You would need to either cash out the entire thing with your employer - they will withhold 20% for the IRS and you will be liable for income taxes AND a 10% tax penalty.

One way to avoid both the 20% withholding AND the penalty would be to do a rollover to a traditional IRA (any brokerage firm or mutual fund company or even bank can do this), then convert it to a Roth IRA. Eligibility to do the Roth conversion presumes you are below the income limits but if you're under 100K..you're fine.

But you can still do the rollover and even if you don't convert, you can access the money as needed, instead of draining it all at once and suffering the maximum penalty.

The rules on the Roth are that you can withdraw your principal (the money you originally invested) without any penalty at any time. Earnings (profits) are tax free to withdraw AFTER the account is 5 years old AND you are above age 59 1/2.

You will owe income taxes on the amount you convert. If your 401K is big enough, you may want to convert in pieces, so as to reduce this year's tax liability, as well as preserve as much as possible to grow for your retirement (which you will need too).

By doing the Roth conversion, you save the 10% tax AND there won't be a 20% withholding so if you're cash tight, you'll have more and you can sweat the tax consequences next year. Clearly if you remain out of work for a while, the taxes won't be a big problem.

Answer 2

You can, there may be penalties for closing it out to early. Such as losing 73% of the money.

Answer 3

I'm sure you can, but you'll be penalized for it. Why would you want to anyway, get a job, you're going to need that retirement later.

Answer 4

i wouldnt do that because you will lose about 50% of your money. But YES you can transfer your 401 to your future company.