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How do I find out how much I have in my 401k n how do I go about cashing it out?

Dec 05, 2013 by Laura from Anchorage, AK in  |  Flag
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In addition to what Kyle has suggested I would like to comment on the cashing out part of your question.

I believe Kyle is asking if you are at your current employer or not because if you are asking about a plan balance at your current employer you will not be allowed to cash out your plan balance until you reach your plan’s “in-service age”. Simply put this is the age you are allowed to cash out your account at your current employer’s 401(k) plan. The lowest common in-service age is 59-1/2 and the highest common is 65.

Whether you are asking about a plan balance at your current employer or an ex-employer you will have to find out how much of your plan balance is “vested”. If your employer contributed funds into your 401(k) account on your behalf you have to work for that employer a certain number of years and a certain number of hours each year to vest in the employer’s contribution. Any money you contributed from your paycheck or rolled in from an IRA or old 401(k) are always 100% vested immediately.

Having said all this I encourage you not to cash out your 401(k) balance even if it is small. If you are like many workers you will have jobs with multiple employers over the course of your working years. If you cash out your retirement plan balance every time you change employers you will have no retirement account balance when you want to retire. This could possibly mean you cannot afford to retire. Conversely, by leaving those small balances in a retirement plan and investing properly you should have a meaningful amount of money when you retire to help you lead the standard of living you have become used to during your working years. Most Americans are not saving enough for their retirement. It is better to be in the group that is.

Over the course of your working career as you change jobs you should consider rolling your vested balance from your ex-employer into your new employers plan or rolling it into an IRA. The IRA is usually a better option as you will usually have a better selection of investments to choose from but if your current employer’s plan is low cost and offers the ability to diversify properly then rolling into your new employer’s plan is a good option as well. As a side note creditor protection in an employer’s retirement plan is usually stronger than it is in an IRA but this depends primarily on your state of residence. I am from Virginia and have no idea what your laws are in Alaska.

1 Comment   |  Flag   |  Dec 07, 2013 from Woodbridge, VA

I am no longer employed at this company. I need the money for my sons tuition

Flag |  Jan 19, 2015

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See above about the in-service withdrawal! If that's not offered, you won't be able to cash out unless you're separated from service, meaning you no longer work for the employer that sponsor the plan. However, you might qualify for a hardship or a loan if you're still working for the employer and the plan allows it. Ask in human resources. Just remember, if it's not in your account, it's not in there working for you for when you have to make your own paycheck down the road!

If you're cashing out pre-tax dollars from a 401k and you're under age 59.5, the IRS will penalize you in addition to the taxes you will pay on it. Be wary of cashing out! If you can roll it over to an IRA or another 401k instead, do it!

Comment   |  Flag   |  Dec 10, 2013 from Alexandria, VA

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Hi Laura, There are numerous ways in which you might go about finding the balance of your 401(k). Unless you opted out of paper statements at some point, you should receive a statement with your balance from the 401(k) plan provider. Accessing an account statement online is also a possibility and usually is not too hard to setup for a first time user. The third option would be to call the plan provider and get your balances directly over the phone. You should be able to get the number from the HR department.

As far as "cashing it out", there are many things to consider in order to take the right course of action. Are you still working for this employer? Have you left and found other employment possibly with another company that offers a 401(k) plan? What is your current age? Are you wanting to continue the deferral of taxes? Would you rather take a lump sum? You should speak with a financial professional you trust to help you work through these questions and more. Good Luck!

Comment   |  Flag   |  Dec 05, 2013 from Bloomington, IL

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