When you work for a city department and you pay your own retirement every month............?

Question

When you withdrawl it to move out of state or something, does the government still keep 25% of it, or do you get it all since you paid it in

Answer 1

The best answer is to "roll-over" the $$$ into IRA or your new employer's 401K. If the amount is over a certain amount, you can keep it with the employer, and eventually you should get a payout when you're old enough to withdraw funds.

Answer 2

If it's taken out pre-tax from your paycheck, then you would owe income taxes on the withdrawal. In addition, if it's what's called a "qualified plan", and it probably is, there would be a 10% penalty for early withdrawal if you are under age 59-1/2

Answer 3

Don't "withdraw' it, that's called a distribution - you want to "roll it over". Do a trustee to trustee transfer - you'll owe nothing.

If you do withdraw it, they will withhold some of it for income tax, you will pay tax on it at your ordinary income tax rate and you will have a 10% penalty. That is bad. Don't do it unless you absolutley have to.