Should I cash out a small 401K?

[Guest mcdonam]

I have a 401k account w/ around $1000. My company was recently bought out and I am wondering should I just cash it out and pay some bills or roll it over into a IRA, Roth or something else. I live in Michigan.

Thanks.

[WDIK]

Since there are so many factors to consider before making this decision, most members of this forum would suggest that you get personalized help from someone that can review your entire financial situation. A few of the things that should impact your decision include:

1) Your age. A 10% excise tax applies for distributions prior to age 59-1/2.

2) Your tax situation. How much of the distribution will be used to pay the appropriate income taxes.

3) Your current financial need. Are you in a stressful finanacial situation without any other sources of income?

[Guest mcdonam]

Thanks for the advice and I am 39 and in the 25% bracket.

[R. Butler]

Roll it over. If we keep cashing out our 401k's we will be eating cat food when we retire.

[Guest Ned Ryerson]

Cash it out to buy life insurance from me. Sell your house, car and all valuables and do the same.

"We have not begun to live until our death is beneficial."

- Attila the Hun