Cashing-Out Your 401k

• 1). Contact the plan administrator for your 401k plan. The plan administrator is the person who handles 401k operations for your employer. Your employer, another employee or a third-party company usually serves as the plan administrator.
  Contact your human resources department to find out exactly who is in charge of the plan. An alternative is to check the paperwork you received when you enrolled in the plan.
  
  
• 2). Tell the plan administrator you want to cash-out your 401k. The administrator will explain the penalties associated with early withdrawal. You will also learn how much money you will receive. The amount you receive is what remains after penalties. If you decide to proceed, the administrator will send you the paperwork.
  
  
• 3). Complete the papers and return them to the plan administrator. If everything is in order, the administrator will proceed to cash-out your plan. Your check will arrive within a few weeks. The IRS considers the 401k money as earned income. You have to report the earnings on your tax return.