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11-11-2008, 04:40 PM
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#1 |
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Registered User
Join Date: Nov 2008
Location: Swedesboro NJ
Posts: 7
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is it possible to roll over part of a 401k
into a new employer's plan and cash out the rest?
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11-11-2008, 08:43 PM
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#2 |
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Registered User
Join Date: Oct 2001
Posts: 1,586
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Debmc1958,
Probably. Tax will need to be paid on the amount kept as cash. Also there may be a 10% penalty applied to the amount of cash you keep. If you cashed out the 401k plan, the plan administrator would need to withhold 20% for tax purposes. You then have 60 days to put this or part of the amount into an IRA. Set up the IRA ahead of the time you are taking the cash-out. |
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11-11-2008, 09:34 PM
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#3 |
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Registered User
Join Date: Nov 2008
Location: Swedesboro NJ
Posts: 7
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Thanks, would it have to go into an IRA or could it go into my new employer's 401k?
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11-11-2008, 09:41 PM
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#4 |
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Registered User
Join Date: Nov 2008
Location: Swedesboro NJ
Posts: 7
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So, I can take the whole 401k and break it up after it was disbursed to me so long as I do it within 60 days? Because that would be ideal - 1/3 cashed out as down payment for a house, 1/3 to my new 401k and 1/3 to IRA.
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11-12-2008, 10:56 AM
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#5 |
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Registered User
Join Date: Oct 2001
Posts: 1,586
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Debmc1958,
Check with your current employer's 401k administrator. Tell them what you want to do and I am sure they will tell you the steps you need to take. I think you forgot 1/3 for taxes and penalty. ;^) |
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11-12-2008, 03:31 PM
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#6 |
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Registered User
Join Date: Nov 2008
Location: Swedesboro NJ
Posts: 7
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haha, yeah, numbers never were my thing.
The current plan administrator is sending me a "packet" in the mail that they feel will explain all my options. We'll see. |
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