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401K fees & taxes
Posted on 1/25/24 at 8:26 am
Posted on 1/25/24 at 8:26 am
Looking for info on what fees and taxes are taken if/when a 401K is closed early.
Likely to be changing jobs and good chance there will be a break between old and new so weighing options. Thanks in advance for info!!
Likely to be changing jobs and good chance there will be a break between old and new so weighing options. Thanks in advance for info!!
Posted on 1/25/24 at 8:29 am to Tiger9376
Likely your biggest cost is the opportunity cost of not having the money invested over the rest of your working life.
Posted on 1/25/24 at 8:34 am to Tiger9376
If you liquidate the account, you’ll owe income tax and a 10% penalty if you are under 59.5 years old.
You should look into rolling it over into an IRA to keep your money invested and avoid the taxes/penalty.
You should look into rolling it over into an IRA to keep your money invested and avoid the taxes/penalty.
Posted on 1/25/24 at 9:17 am to Tiger9376
Also, your 401k will apply 20% mandatory withholding from taxable distributions. It’s best to roll to IRA and decide for yourself how much, if any, you’d like to withhold.
This post was edited on 1/25/24 at 9:18 am
Posted on 1/25/24 at 11:50 am to Tiger9376
I think there is some sort of penalty of a 401k is rolled over after a 60 day period. Not sure tho.
This post was edited on 1/25/24 at 11:55 am
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