401k

[mellowtigger]

I have never wanted a 401k stock market "retirement savings" account.  Everywhere I worked during the last 20 years, though, has given me one even when I deliberately fail to sign the paperwork for it.  Why are companies even allowed to do that instead of pay people higher salary if they simply opt out of it?  I just now looked at the account I got from my last job (ended a few weeks ago).

HOLY MOLEY!

That's more money than I got in a whole year's salary, pre-tax.  I could immediately pay off my house and still have lots of money left over for house repairs, assuming I got the full amount by cashing out now.  Or save it all and wait out this pandemic a whole lot longer.

I might as well cash out.  The dashboard says I've already lost $5K in value this year due to stock market drops, and I expect it to get worse this year.  I just need to look up how much I'll pay in taxes and "early withdrawal" fees.

Anyone here familiar with this process and the penalties involved?  I've already looked over the Fidelity website, but it doesn't get into specifics.  I've created a new link today to my actual bank.  Once that's confirmed, apparently I need to call Fidelity to begin the closure process, so money can be delivered to the bank.

Edit 2022 July 28: I did it.  I withdrew the full amount, with the automatic deposit expected to complete on Tuesday next week.  I'll post details of the numbers and why it makes sense to do it, after all of the money movement has completed.

Comments

[mtbc]

401(k)'s are usually a good deal up to the employer match, at least, best to get as much money as one can out of one's employer! If you withdraw early, I think you're basically looking at income tax plus ten percent. I don't have anywhere near enough to be useful for retirement but it'll be useful for something someday.