How To Cash Out Retirement
Wondering how to cash out retirement accounts? Cashing out is usually an easy process, but most financial experts advise against it, as you may face heavy financial penalties for cashing out early. If you need the money despite the potential for taking a financial hit, here's how to get your hands on your cash:
- Review your retirement account. There are different types of retirement accounts, and each type may be somewhat different in terms of pre-tax contributions and similar matters. By reviewing the details of your specific retirement account, you can learn how much you'll have to pay in taxes and penalties to get your hands on your money.
- Consider your options. Your retirement account may allow you to cash out a portion of the funds instead of the whole amount. This may work for you if you don't need the full amount and wish to maintain the account. In some cases, however, those who want to cash out retirement have to withdraw all of their retirement savings.
- Calculate your taxes and penalties. Before you go forward with your plan to cash out retirement, figure out how much of your money you will lose by cashing out now. Once you know how much you will actually be able to pocket, you'll have an easier time deciding whether to cash out or not. If you prefer to avoid doing these calculations yourself, you may ask a tax advisor or someone at the institution that holds your retirement account for help.
- Cash out your retirement. You'll typically have to complete some forms to cash out retirement. You may ask the firm that holds your account to send these forms in the mail. If you're in a hurry, however, you may prefer to visit the nearest branch and sign them in person.
- Receive your money. Once you request your retirement funds, you may have to wait a few days to receive your money. Speak to someone at the firm to learn how long this will take and how you will receive your money.