Keep in mind
Your investment options are limited to what is offered in the plan.
You’re still subject to the rules and restrictions of the plan.
If your account balance is $1,000 or less, your plan might cash you out. If your balance is between $1,000 and $5,000, your plan might roll your balance into an IRA selected by your former employer.
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Keep in mind
Money you spend now won’t be there for you later.
Your employer must withhold 20% of the taxable portion of your distribution for federal income taxes. You may owe more at tax time.
A 10% early withdrawal penalty may apply if you’re under age 59-1/2. If you’re 55 or older when you leave your job, withdrawals are penalty-free but still taxable. Other exceptions may apply.
Withdrawals from Roth accounts are tax- and penalty-free if the account was established at least five years before, and if you are at least 59-1/2 years of age, are disabled or have died.
You may owe state and local taxes on the taxable portion of your distribution.
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