Anyone ever liquidate their 401k in here?

[the cac mamba]

I have like 25 grand in mine. if i were to hypothetically say fukk it, cut me a check. what am i walking away with, like 15-20k?

dont plan on doing it anytime soon, but just outta curiosity

 

[OfTheCross]

I have like 25 grand in mine. if i were to hypothetically say fukk it, cut me a check. what am i walking away with, like 15-20k?

dont plan on doing it anytime soon, but just outta curiosity

Yeah... 15-18K seems right.

Plus then i think you get taxed for what you keep as income unless you roll it over

 

[the cac mamba]

Yeah... 15-18K seems right.

Plus then i think you get taxed for what you keep as income unless you roll it over

so whatever my employer matches is pretty much getting offset when the taxes at the end come out, huh

i mean assuming the fukkin thing grows what, like 5%. but i lose that money when they tax it. are these things really even worth it?

 

[OfTheCross]

so whatever my employer matches is pretty much getting offset when the taxes at the end come out, huh

i mean assuming the fukkin thing grows what, like 5%. but i lose that money when they tax it. are these things really even worth it?

Pretty much

 

[el_oh_el]

so whatever my employer matches is pretty much getting offset when the taxes at the end come out, huh

i mean assuming the fukkin thing grows what, like 5%. but i lose that money when they tax it. are these things really even worth it?

Probably only when you retire honestly

 

[MillionMills]

You only get whats vested

Then you're taxed 10% penalty on early withdrawal

Then Fed and CA may withhold a small %

& the withdrawal is taxed as income come tax season

 

[Pyrexcup]

@Stuntone

 

[EztheUnknown]

Depends if your 100% vested in the employer portion. Most custodians will deduct 20% Fed withholding and depending on which state you’re in those state taxes may or may not be optional at the time of withdrawal. You’ll also be hit with 10% penalty for early withdrawal.

 

[Stuntone]

You better liquidate it before another crash happens and that 15-18k will be around 5-8k like in 2008.

 

[Originalman]

Like others have said it depends if you are 100% invested.

If you are still at the company then you will have to take out the 401k and pay the 20% early withdraw fee plus pay taxes on what you take out.

If you are no longer at the company. Then roll the 401k to an ira and take it out the early withdraw fee is just 10% then.

 

[beenz]

Yeah... 15-18K seems right.

Plus then i think you get taxed for what you keep as income unless you roll it over

They tax u to Bolivia for cashing out early. You were never taxed on that money to begin with so you're gonna have to pay that. Plus a penalty cuz ur not of retirement age.

 

[DrunkenNovice]

I did a loan before, which is untaxed and you pay yourself back + interest....basically being your own bank.

Only risk is if you leave, or get fired, from your company before paying back you have a set time linit (see your plan) before it counts as income and you get taxed.

 

[Camile.Bidan]

I have like 25 grand in mine. if i were to hypothetically say fukk it, cut me a check. what am i walking away with, like 15-20k?

dont plan on doing it anytime soon, but just outta curiosity

It's probably one of the stupidest things that you can do. Unless you are using it to pay of some debt.



1) You will get a penalty.
2) You may or may not get a tax withholding. What other people didn't tell you is that usually you have to elect to have tax witholding. You may have a nasty surprise come 4/15
3) You will get taxed at your ordinary income tax rate.

If you have 40k in income then you have to add that 20K withdrawal to your AGI for a total of 60K AGI (Adjusted Gross Income), and that is not a good thing.




Why short change your future by pulling money out now? your investment will grow at 7% on average until you retire. That has been the case for the last 100 years. Of course there are ups and downs, but the market has grown at an average rate.

If you are worried about an impending crash, then monetize the investment within your 401k by transferring all the funds to Money market accounts.


If you are going to cash it out to pay high interest credit card debt, then I think it's a good a idea. If you are going to cash it out to buy things and consume a bunch of shyt that have no long-term pay-off, then it's a very bad idea.


My wife cashed out her IRA, which has a similar tax treatment, about 6 years ago. I had to deal with a unfortunate tax surprise because of it. I ended up owing the uncle sam 5K, when I planned to owing less that 100 dollars on 4/15

 

[the cac mamba]

If you are worried about an impending crash, then monetize the investment within your 401k by transferring all the funds to Money market accounts.

appreciate the post. i actually have zero debt and plenty of money kickin around i was just curious

but since you mention it, whats this about

 

[winb83]

I have like 25 grand in mine. if i were to hypothetically say fukk it, cut me a check. what am i walking away with, like 15-20k?

dont plan on doing it anytime soon, but just outta curiosity

Don't you'll lose probably 40% in taxes and fees. When I quit my first job I took the check and bought a cheap car. It was a dumb decision but I was so broke I couldn't afford a car otherwise.