Should I pull everything out of my 401k?

[Biscuit]

Isn't it free money if my employer is contributing? Or is it not worth it?

[Anne C]

There are big penalties for touching it. Put more in, give till it hurts, you'll be glad later on.

[Rick B]

Never pull money out of a retirement account until you retire.

That is the point of a retirement account.

If you cash out one, you will pay penalties and taxes on the money.

[starbux_girl]

VERY BAD IDEA. your 401k is a long term investment for retirement not a saving account that you can take freely from.
"When you take an early withdrawal of your 401k money, there is a mandatory IRS early withdrawal penalty of 10%. Additionally, your 401k money will be treated as taxable income. 20% will automatically be pulled out, and the remainder will is required to be listed as income when you file your federal and state income taxes. Depending on the amount in your 401k, this can be a considerable some of money and can cause you to have to pay a larger than expected amount of income tax."
this website explains it better than i can:

http://www.gatherlittlebylittle.com/2008...401k-plan/

[kingarthur305]

Don't take anything out. If your young than this down market is your friend. A lot of good stocks are getting cheaper and this is your chance to buy a lot of stocks and benefiting greatly when the market cycles back again in the future.

Don't worry about the market if your young. Just put everything you can in their and you won't regret it.

[jonathan_insall]

Should I step out in front of the next public transit bus? No, especially if I understand it's purpose.

[Maggie Jeans]

1. Don't take it out
2. usually you are contributing from your pay so it is not free money.
3. if your employer contributes, you can consider that in your return on investment.
4. If you take it out, you will be charged the taxes (they are usually funded before taxes are taken out), plus another 10% if you are not at or close to retirement age (55 1/2 I think )
It is just not worth it unless you are deperate.

[Saru-kun]

No don't even think about touching it. You will loose close to half of it in taxes if you are under 59 1/2. You can't count on Social Security when you are older you need a nest egg to live on later. You should be adding more money to it now while stocks are low. You are able to buy more shares with a low market. This is the best time to add not take away. You bought many of those shares when the market was high you would be selling them low and then paying taxes and penalties. Remember buy low sell high it is not just idle chant it is sound investment advice.

[maxmom56]

Typically, you're not entitled to the employer's contribution until you are vested which usually happens after you've been with the company for a number of years. If you withdraw your own contributions, you will owe taxes on the withdrawal as well as a penalty.

[helloeveryone]

hello - don't pull it out and the match is indeed free money. make sure to give enough to get the full match, but better to contribute to the max allowed. good luck.