i only have about 1200 in my 401k and was wondering since i can cash it out if the penalty would really affect me that much since the amount is so small
2007-03-23 11:06:58 · 5 answers · asked by alienhunter34 2 in Business & Finance ➔ Personal Finance
Why don't you just roll it into an IRA and let it grow.
Yes, you can cash it out. You'll pay income taxes on the entire $1200 plus a 10% penalty. Rolling it into an IRA is a better idea. Besides, you'll be saving for your future that way.
2007-03-23 11:12:47 · answer #1 · answered by Faye H 6 · 2⤊ 0⤋
Your best bet is to hold on to that money and either roll it into your new company's 401(k) or an IRA. That way you still have a nice start to saving for your retirement. However, if you have immediate debts you need to pay off, you might accept the penalty to pay the things you already owe, much sooner.
2007-03-23 18:13:06 · answer #2 · answered by KindaConfused 3 · 0⤊ 0⤋
You'd be better off to roll it over into an IRA. With that small of an amount, you won't be left with much at all if you cash it out.
2007-03-23 18:42:42 · answer #3 · answered by Jen G 5 · 0⤊ 0⤋
figure you will lose 30% (20% tax since it was tax-deferred when you contributed, and 10% early withdrawal penalty.) so, you'd lose $360 of the $1200.
you may be able to roll it over into the plan at your new company, so you might want to check. that way you won't lose anything.
2007-03-23 18:13:44 · answer #4 · answered by Mel 6 · 0⤊ 0⤋
If you have the funds available, why not pay the taxes on it now and roll it over to a Roth IRA?
2007-03-23 19:14:59 · answer #5 · answered by Anonymous · 0⤊ 0⤋