ST Alpha - "Am I crazy to consider taking the penalty and withdrawing an old small retirement account?" (Reading a Post)

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Am I crazy to consider taking the penalty and withdrawing an old small retirement account?

Posted by Dano (aka dano) Oct 7 '24, 13:04

I've had/am having a few things done to my house. I could use some extra money to pay for it.

I have an old retirement account from back when I was in Atlanta. It's 403B which from my understanding is the same as a 401K. I haven't touched it in any way since 2010. It now has a little over $11,000 in it.

I'm actually considering just emptying it and using the money for my house. Is my understanding correct that essentially I would forfeit 10% plus the taxes?

It's just such a small account that I periodically forget I even have. I had thought about rolling it into my 401K, but now I'm thinking just eating the penalty and taking the cash.

Responses:

Do it -- nm - Trending Oct 7, 13:45
but if you roll it into a 401k, doesn't that just count as a normal contribution that you can then withdraw penalty free? -- nm - mr mooch Oct 7, 13:26 5
- I didn’t think I could withdraw from a 401k without penalty until I got older. -- nm - Dano Oct 7, 13:29 4
  - 59 1/ 2 is the cutoff for the 10% penalty - decline Oct 7, 13:43
  - i thought the rules were looser than for IRAs but maybe not -- nm - mr mooch Oct 7, 13:31 2
    - 457b you can withdraw w/o penalty I think. 403b no. -- nm - ☀️ amandachem ☀️ Oct 7, 13:34
    - Nope. Still a mega penalty. -- nm - Dark Callisto 🦊 Oct 7, 13:32
for that amount it's an either or deal (imo). If you have something you can use it for, take the cash. You'll get dinged for 20% automatic withholding - decline Oct 7, 13:18
I do not. I am considering doing this sometime next year so I can buy out my car. -- nm - Jovian Oct 7, 13:07

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Am I crazy to consider taking the penalty and withdrawing an old small retirement account?

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