The value of my 401K was $1,577.00. I closed out my 401K and only received $624.00 before taxes. Can your employer take over | 401k Questions

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Asked 11/13/2008

The value of my 401K was $1,577.00. I closed out my 401K and only received $624.00 before taxes. Can your employer take over

I was added to my company 401K. Two months later I left this job. Finally, 5 months later I received my 401K statement. The total was $1,577.00. I opted to close it out since I didn't have anywhere to roll it over too. My check was $624.00 before taxes. Can they make you pay 2/3 penalty for closing your 401K?

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Answer 1/2 - Submitted 11/14/2008

You only paid a 10% penalty

the rest of it, may have been from taxes, or else more probably you weren't able to keep any funds put in by the employer.

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Answer 2/2 - Submitted 11/23/2008

Agree, in addition your employer had to keep 20% for withholding. This will be reported to you on a W2 in January.

Next time roll over your distribution into an IRA so you will have something when you retire. In that case there would be no 10% penalty.

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