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Disgustedman

Senior Member
So, my last job finally released my 401K account to me. A whole $981.52 BUT wait! There's less! 20% IRS tax and of course the $50 withdrawal fee. So, $735 after all.

They made bank investing for me, but can't stand handing out a check without making you still pay.

Well, the account will close and I'm done with them.

(/Rant)
 

how much did you put in ?

just because you paid 20% tax that doesn’t mean that is what you owe ..you may get back money . If you rolled it in to a personal Ira there would have been no tax at this point .

what was it in ?

I have had many 401k plans and never Had a withdrawal fee .

plus why didn't you roll it in to an Ira with no taxes due ?
 
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How old are you? You might be less than 59 & 1/2 which is why the tax.
 

Chet said:
How old are you? You might be less than 59 & 1/2 which is why the tax.
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401ks by law have to hold back tax if you don’t roll them over in to iras .

if one is taking the cash and not rolling it then it is a requirement.

“. When you take 401(k) distributions and have the money sent directly to you, the service provider is required to withhold 20% for federal income tax. 1 If this is too much—if you effectively only owe, say, 15% at tax time—this means you'll have to wait until you file your taxes to get that 5% back.”
 
mathjak107 said:
how much did you put in ?

just because you paid 20% tax that doesn’t mean that is what you owe ..you may get back money . If you rolled it in to a personal Ira there would have been no tax at this point .

what was it in ?

I have had many 401k plans and never Had a withdrawal fee .

plus why didn't you roll it in to an Ira with no taxes due ?
Click to expand...
It had contained $981.00 it was over $10,000 but I had to drain out $8,500 as job loss (covid) did me in. So what was left, was company controlled and 5 years wait till release.

The 20% isn't the complaint, it's that $50 fee. They made money but stick it to their clients anyway for pennies more.
 
Well except for the 50 buck charge we all fail to see the purpose of this rant and post.

Initially you haven’t said how much you put in .

Initially you haven’t said what it is invested in

Initially you haven’t said why you cashed it out instead of rolling it over to an Ira with no tax withholding.

you obviously didn’t know the law requires them to hold 20% tax back but that it may not be what you owe .

so again , what is the purpose of this post ? The 50 bucks ?

I never had any other firm charge me to move a 401k, at the least you should have warned who the firm is
 
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First of all, instead of taking the distribution, you should have rolled it over into an IRA, Also, you can tell the admin not to take the 20% out. Unfortunately, it is too late, but this might help others in the same situation,
When I retired, I rolled my 401k into an IRA. When I take distributions, I tell the admin not to withhold anything for taxes as I pay estimated tax.
 
Lethe200 said:
There is always a fee for closing out an account. I'm surprised it's only $50. When I worked in financial services, standard fee for closing out any account was $100.
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Are you talking about any specific types of accounts? I've closed accounts before..bank and brokerage and was never charged any fees. The only brokerage that wanted to charge $75 for transferring was TD Ameritrade, so I left the investments there. Good thing because turns out they are in the process of merging with Schwab, my other brokerage, anyway.
 


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