What is the penalties for an early withdrawl of you told 401K and company cash pention?

Due to the outsourcing of my companies manufacturing business (IMATION). I am being laid off, but as part of my severance package I am able to withdraw my cash pension, plus whatever I contributed to 401K which totals around $12,000.00. What would i end up paying if i withdraw all this and not roll it over?

What is the penalties for an early withdrawl of you told 401K and company cash pention?
YOu should roll over your pension and 401 k to a qualified plan. Your bank's financial advisor can help you with this. Do not cash them out. You'll pay up to 50% in taxes and penalties by the government. Ask an advisor before you do anything. They are free to you initially. Good Luck.
Reply:All money withdrawn from a 401k is income to be declared at tax time, you only pay the penalty clause if it is withdrawn before you are 59 1/2 and must be for specific reasons as defined by the plan. The penalty amount varies by plan but usually runs about 25%. Are you sure they are permitting you to cash it out?? or did they mean a no penalty roll-over into an IRA? My plan doesn't permit what you discribe.


Regardless, my advice; Don't cash out, roll it into an IRA or another 401k. In most cases you get more this way.
Reply:It depends on your individual policy, but usually there are huge fees and taxes for early withdrawal, up to 40% of your investment.


Unless you need the money for a specific approved purchase, like a first home, medical necessity, or college tuition, it's better to just roll it over into an IRA.