Liquidating your 401k
And that’s if your employer’s retirement plan allows it.They are not required to offer hardship distributions, so the first step is to ask the Human Resources department if this is even available.
And unlike a home equity loan where payments can be drawn out over a 10-30-year period, most 401k loans need to be paid back on a shorter time table – like five years.Also, your employer must withhold 20% of the amount you cash out for tax purposes.There are some exceptions to the rule that eliminate penalties, but they are very specific: If you are considering cancelling contributions to a 401k, you would be better served to merely suspend those contributions.As for the first part of the question – closing a 401k account? Simply go to your human resources department and make a request to stop paycheck contributions. When the paperwork is completed, you no longer will have a 401k contribution deducted from your weekly paycheck.However, the real question about 401k accounts almost always is about early withdrawals, meaning taking money before you reach 59 and a half years of age.