Thinking about cashing out your 401(k) before age 59½? See the real cost — most people are shocked.
A 401(k) rollover to an IRA avoids all penalties and taxes. Betterment makes it free and automatic — and your money keeps growing tax-deferred.
Roll Over to Betterment IRA (No Penalty) →Most plans let you borrow up to 50% ($50k max) and repay yourself with interest — avoiding penalties entirely. Check with your plan administrator first.
Explore Empower 401(k) Options →Under 59½: 10% IRS penalty + ordinary income tax. Total loss typically 30-50%.
Exceptions to the 10% penalty: Disability, death, IRS levy, medical expenses >7.5% of AGI, SEPP payments, first-time home ($10k IRA only), higher education costs.
Roth 401(k) contributions can be withdrawn tax and penalty free — but earnings still face the 10% penalty before 59½.