Hi,
I'm in the process of leaving my job in the next few months. My finances require that I cash out some of the benefits I acquired as an employee through my firms 401K plan. I would like to know what financial arrangement would yield the most pre-tax money from cashing out my 401K plan.
Here are my questions:
If cashed out through company on resignation date - Would I be subject to immediate tax deduction since I am a departing employee. Concurrent, I will get my direct deposit as a standard employee deduction check as well.
If I keep it in the company Fidelity plan after I leave (permitted) and decide to cash it out 4 months from then; would there be a disbursement made from Fidelity or my old firm. If it were from my old job, would it then still be taxed with withholding as were my paychecks as an employee? Or is it possible to cash it out through Fidelity where I might be able to avoid having the tax withheld.
The problem is, I need to leave my job but want to capitalize on a small sum that has been invested ($8000).
I'm aware that it is taxed at the standard rate plus a 10% penalty. But for the moment, I would like to obtain the full value of the 401K PRE TAX. Next April, I'm more able to deal with any minor related tax issues by then.
Also, would rolling it into an IRA and cashing it out from there allow me to avoid some penalties?
Thanks.
I'm in the process of leaving my job in the next few months. My finances require that I cash out some of the benefits I acquired as an employee through my firms 401K plan. I would like to know what financial arrangement would yield the most pre-tax money from cashing out my 401K plan.
Here are my questions:
If cashed out through company on resignation date - Would I be subject to immediate tax deduction since I am a departing employee. Concurrent, I will get my direct deposit as a standard employee deduction check as well.
If I keep it in the company Fidelity plan after I leave (permitted) and decide to cash it out 4 months from then; would there be a disbursement made from Fidelity or my old firm. If it were from my old job, would it then still be taxed with withholding as were my paychecks as an employee? Or is it possible to cash it out through Fidelity where I might be able to avoid having the tax withheld.
The problem is, I need to leave my job but want to capitalize on a small sum that has been invested ($8000).
I'm aware that it is taxed at the standard rate plus a 10% penalty. But for the moment, I would like to obtain the full value of the 401K PRE TAX. Next April, I'm more able to deal with any minor related tax issues by then.
Also, would rolling it into an IRA and cashing it out from there allow me to avoid some penalties?
Thanks.
