Does anybody know the penalty fee for cashing out a small 401?

I want to cash out a 401 from years ago but wondering if it's even worth it it's under $3000?

Re: Does anybody know the penalty fee for cashing out a small 401?

You should call your accountant they can figure it out for you. There are also some exceptions, you may not have to pay a penalty.

Re: Does anybody know the penalty fee for cashing out a small 401?

If you are below 59 1/2 - no matter how small - yes you pay a penalty.

10% penalty applies on your federal income taxes and normally they will withhold 20% federal withholdings and it is added to your income for the year.

Re: Does anybody know the penalty fee for cashing out a small 401?

I did this once with about 2,500 and got SLAMMED at tax time

Re: Does anybody know the penalty fee for cashing out a small 401?

Like a PP indicated, if you are under 59 1/2 you will be subject to the 10% penalty.

Plus the amount you take will be included in your income at your ordinary tax rate.

If you have an accountant, you should discuss this with them. You just want to make sure if you cash it out, that it doesn't push you into the next tax bracket, compared to where you were at in 2011.

Re: Does anybody know the penalty fee for cashing out a small 401?

10%. DH and I cashed out his, worth about $5,000.00 when he left he old job. We also got killed at tax time because you get the penalty, PLUS you get taxed on the whole sum because it's considered income. We lost about a grand.

Re: Does anybody know the penalty fee for cashing out a small 401?

Same as the other posters said.
At the end of the day you have to decide if its worth it. We've taken money out to pay off bills so the penalty was worth it.