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401k and 403b Plans

What is the penalty for cashing out 401k early?

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Wiki User
November 17, 2009 2:50AM

The penalty is normally about 10% of the money you pull out. Additionally, you'll have to pay taxes on that money. Finally, you'll miss out on potential gains by not having the money in the market. I wouldn't recommend cashing out your 401(k) early unless it is for a dire emergency.