Cashing out a 401(k) can set your life's financial planning back.
One of the keys to building a successful retirement is to start as early as possible, since the longer money sits, the longer it has to grow.
If you've switched jobs, see if your new employer offers a 401(k) and when you may be eligible to participate.
Many employers require new employees to put in a certain number of months of service before they can enroll in a retirement savings plan.
It may be tempting to cash out a 401k when switching employers because who doesn’t like a large lump sum moved to their bank account?
Cashing out will hurt from a tax and retirement planning standpoint.
In that case, some plans allow you to borrow for 25 years.
Sometimes there’s also a loan floor, or minimum amount you must borrow.
The third is that you usually have to pay a 10 percent penalty as well.
This means that you don't get a lot out of what you take out of your account.
Cashing out a 401k from a previous employer is simple.
Your previous employer should provide instructions for how to do this.