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Returning Member
posted May 31, 2019 6:04:21 PM

What are my options to have less of a penalty or taxes to withdraw on a 401k ?

I'm unemployed and waiting to see if I get benefits. I do have 401k and don't what my options or to cash it out or roll it over. Trying to use to live on with the fewest penalities  and taxes possible.

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1 Best answer
Level 15
May 31, 2019 6:04:22 PM

This web reference explains your options very clearly:  http://finance.zacks.com/close-out-401k-account-9392.html

3 Replies
Level 15
May 31, 2019 6:04:22 PM

This web reference explains your options very clearly:  http://finance.zacks.com/close-out-401k-account-9392.html

Level 15
May 31, 2019 6:04:25 PM

Any distribution is likely going to be taxable, so consider rolling it over to an Traditional IRA.   You can then draw down on the IRA as needed.

There are some10% penalty exceptions. For example, there is no penalty if you were age 55+ at the time you left that employment. See others here:

https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-tax-on-early-distri...

Level 15
May 8, 2022 5:04:32 AM

you can't avoid penalties and tax on early 401k withdrawal, so take out as little as possible to let you get by.