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Question

Asked 11/6/2008

Can I Cash out a 401K early while still employed at my current employer?

I am currently working for a steel mill, age 42, fully vested account with Fidelity, can I take the penalties, pay the taxes, and close the account?

 
 
 
 
 
Answers

Answer 1/6 - Submitted 11/6/2008

You should be able to. Call Fidelity to see what is involved.

 
 

Answer 2/6 - Submitted 1/28/2009

People are under the impression they can take their accounts, and just pay the penalty and taxes.
No so, Usually...
For most retirement plans, you MUST sever employment, Reach retirement age, or be permanently disabled in order to close the account. And taxes and fees will Still apply if under 59 1/2.
There are ways for most employees to withdraw or borrow a portion in most plans.

 
 

Answer 3/6 - Submitted 9/21/2009

Can i withdraw my money and put it into my savings

 
 

Answer 4/6 - Submitted 12/11/2009

No! The IRS inposes strictly restriction on cashing out your 401-K while employed at your current job
the only way you may cash out is if you're retired or terminated from your current employment

 
 

Answer 5/6 - Submitted 12/12/2009

I think you would be better borrowing money from your 401k rather than emptying the account. The penalty and tax you will pay will leave you with very little money left. Plus you are only 42 surely it is better to continue putting money into your 401k for your retirement

 
 

Answer 6/6 - Submitted 12/12/2009

The age to withdraw funds is 59 1/2. However, you can withdraw some funds if you can show hardship and need the money to pay bills or on medical expenses. You can also take out a loan form your 401k which you pay yourself back with interest. Otherwise, there are penalties and the government akes out on those.

 
 
 
 
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