My employer is getting rid of the cash balance pension program, in which my current balance is about $3,000 (haven't worked there that long). We have several options, including transferring to our 401k or cashing out (the main two I'm interested in).
How bad is the tax penalty for cashing out? I certainly would think of doing this at all if it was a much higher amount of money, and to be honest, my husband and I recently purchased a home and wouldn't mind extra cash to pay for furniture and whatnot.
Or...
Someone just tell me I'm being hasty talk me out of it!
How bad is the tax penalty for cashing out? I certainly would think of doing this at all if it was a much higher amount of money, and to be honest, my husband and I recently purchased a home and wouldn't mind extra cash to pay for furniture and whatnot.
Or...
Someone just tell me I'm being hasty talk me out of it!
@drd1170 wrote:
My employer is getting rid of the cash balance pension program, in which my current balance is about $3,000 (haven't worked there that long). We have several options, including transferring to our 401k or cashing out (the main two I'm interested in).
How bad is the tax penalty for cashing out? I certainly would think of doing this at all if it was a much higher amount of money, and to be honest, my husband and I recently purchased a home and wouldn't mind extra cash to pay for furniture and whatnot.
Or...
Someone just tell me I'm being hasty talk me out of it!
Not sure if a pension is treated as pre-tax funds. If you're not 59.5, there could be a 10% penalty ontop of the taxes. If you could stave off spending it and, instead, adding it to your 401K, you would thank yourself later. Ask your tax advisor to be sure what the ramifications include.