If you are considering cashing out your 401K plan, there are some things you need to know before you do. Check this guide to make sure your application will be easier. For more information http://www.newhorizon.org/credit-info/need-know-cashing-401k/ Want a personal loan for bad credit? http://www.newhorizon.org/Info/personaloans.htm

1. What You Need To Know
Before Cashing Out
Your 401K
By: newhorizon.org

2. • If you are considering cashing out
your 401K plan, there are some things
you need to know before you do.
• With taxes, creditor protection and eligibility
to understand, cashing out your 401K may not
be as easy as you think.

3. Eligibility
Are you eligible to cash out?
• If you STILL work for the company that sponsors your 401K plan,
you are NOT eligible.
• You may, however, be eligible for a 401K loan plan or a hardship
withdrawal that would allow you to extract some of your money
from your 401K account.
• Not all plans offer these options so it is best to check with your
plan’s administrator first.

4. Eligibility
• If you DO NOT work for the company that sponsors
your 401K plan, then you are ELIGIBLE to cash out of it.
• If you are not in dire need of the money right now,
you may want to rollover your 401K into an IRA so you
can pay fewer taxes and keep more of your money.

5. Taxes
• There are many incurred fees involved with cashing out your 401K
plan.
• If you have not yet reached age 59 ½ your withdrawal will assess a
10% penalty tax above and beyond the standard income taxes.
• Yes, there are some age rules you have to follow to when cashing
out your 401K plan.
• If you are aged 55 to 59 ½ you can avoid the 10% penalty if you
ended your employment after you turned 55.
• If you are over 59 ½ you will not be subject to any penalty taxes but
will be charged income taxes.

6. Cashing Out
STEPS:
1. Obtain the required paperwork to cash out your plan.
2. Call the number that appears on your plan statement and
request the paperwork.
3. When you receive it, you fill it out and have it signed by the plan
administrator from the firm that sponsors your 401K plan.
4. The paperwork is then submitted and you will receive your
money soon.

7. Depending on the plan and your company, it could take
several weeks or even months to receive your funds.
Your plan’s documents will list the specific rules for
cashing out your 401K and may even offer some helpful
advice saving you time along the way.

8. Resources:
• More information about cashing out your 401k:
http://www.newhorizon.org/credit-info/need-know-cashing-401k/
• Related Article: Choosing Between Paying Off Credit Card Debt
and Funding Your 401k http://www.newhorizon.org/credit-info/choosing-between-
paying-off-credit-card-debt-and-funding-your-401k/
• Is It Possible to Retire Rich? http://www.newhorizon.org/credit-info/is-it-possible-
to-retire-rich/
• If you are looking for credit cards for bad credit
http://www.newhorizon.org/Info/unsecured.htm