Quote:
Originally Posted by pyroguy
PLEASE DO NOT CASH OUT YOUR 401k! You can do a direct transfer and roll it into a back door Roth, but please do not cash it out! If you cash it out you’ll be hit with a tax penalty of your bracket PLUS a 10% penalty. If you do a direct transfer you will be taxed, but you will not have the penalty.
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I said that in essence, I will be cashing it out. The 401(k) will cease to exist and I will pay taxes on the whole thing, I just won’t pay the 10% penalty for being too young.