Before I understood financial freedom and self ownership I setup a 401k because that’s whatever everyone said I should do, except my dad. My dad said I should just keep the money myself which I now understand he was 100% correct. I tried to pull the money out of the 401k and cancel the account and I was told I can’t do that because I’m not at retirement age. So basically my money is being held hostage and I can’t access it even though I’m the one who works for it. In short, financial freedom and self ownership are important.
Discussion
Can you not take it even with a tax penalty?
The bill you found and gave to him was worth this tip!
They said best they could do is loan me my own money lol
That doesn’t sound right.
I’m not a financial advisor but I did this recently.
You should be able to take the money out. You will have to pay taxes on the capital gains plus an additional 10% tax penalty - so make sure you set that portion aside.
Yes. That sounds accurate.
It would be roughly a 40% tax penalty to pull it all out because it was contributed pre tax.
Although, I am not a FA.
That’s terrible 🤬
no way. you should be able to pay the tax and exit. don't let them scam you
You can also look into something called the rule of 72(t). You don't get access to your entire account, but you can take out "substantially equal periodic payments" over a 5-yr period and only pay the capital gains without paying the penalty.
You can't access the REST of that particular 401k until the GREATER of 5 years has passed...or the time you turn 59 1/2.
I waited until I got within 5 years of 59 1/2.
Here is one of the first posts I read about it.
https://www.madfientist.com/how-to-access-retirement-funds-early/