mike s.
First Time Poster
Cash: $ 0.25
Posts: 1
Joined: 03 Jan 2007
Location: Fallbrook, CA
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| Downsides to Cashing Out a Defined Contribution Plan? |
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Hello,
I'm looking for some information regarding the pros and cons of cashing out a DCP. I just moved to a new company after 19+ years with them, and have both a well-funded 401K and a DCP. I am thinking of cashing out the DCP but would like to know the penalties for doing so. I understand that 20% will be taken out for expected taxes, and there would also be a 10% penalty. But is that all, or are there other charges that might pop up? Is there a way for me to determine what the actual tax would be, rather than assuming the 20%? I could try doing my taxes several different ways, but that would take a significant amount of time. I believe I can invest the after-tax-after-penalty DCP money safely in real estate and probably do better than the $ would do by keeping it in stocks/bonds.
Thank you for any input.
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