Why Cashing Out Your 401(k) When Changing Jobs Could Hurt Your Retirement Savings

Sunday, 7 April 2024, 11:18

Cashing out your 401(k) when switching jobs could have serious negative consequences, as studies show that 40% of workers cash out their retirement plans. Not only do you face early withdrawal penalties, but you also miss out on potential growth for your future. Expert advice suggests keeping your 401(k) in place, rolling it over to a new employer's plan, or transferring it to an IRA to safeguard your retirement funds.

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Why You Shouldn't Cash Out Your 401(k)

Cashing out your retirement savings is a move you might sorely regret. Years ago, it was pretty common to get a job out of college and stick with the same employer for decades. But nowadays, job-hopping is not only pretty common, but more than acceptable.

Consider Retirement Impact: Cashing out a 401(k) could have seriously negative consequences.
Future Growth Potential: You also deny yourself the growth that could've been attained on that sum.
Expert Advice: Think twice about cashing out a 401(k) when leaving a job. Keep the funds invested to build a solid retirement nest egg.

This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.

Why You Shouldn't Cash Out Your 401(k)

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