Page Section Navigation
Go to: Header
Go to: Utility Navigation
Go to: Primary Navigation
Go to: Content
Go to: Footer
 
Ask the Experts

Ask The Experts

Q:
How much will I lose if I cash out my 401k?

I am changing jobs for health reasons and going to a lower stress (and pay) job. My new job will not have a 401k plan. I have just over $22,000 in my 401k account. If I take the 401k money and use it to pay down debt can you tell me how much of the 401k I will keep and how much I will lose in tax and penalties? -Steve

Steve,

Too much. That’s how much you’ll lose. I know it seems like your retirement money is just sitting there, but messing with it is messing with your future. Your 401(k) money was set aside to build a long-term nest egg. You should contact your company 401(k) administrator about how to handle the roll over of this account and what the plan rules apply here.

I highly recommend that you consider a debt repayment program instead.

A credit counselor may be able to help lower your interest rates, giving you smaller payments to help you pay down that debt. They can be reached at 800.432.7310. By the way, congratulations on your decision to take good care of yourself! Your health is your most valuable asset.

Ask the Experts
Explore by:
Ask The Experts

If you do not find the answer to your question in the archive, write to the Advice Team today! A member of the Advice Team will personally respond (by email) to your question by offering answers, helpful tips or solutions. This is a free service offered by MMI.