Is the whole 30% penalty 401k a scam?

[blondfrog]

Its your money and I get the whole percentage match or whatever but 30% seems criminal.

[Sevenpointfive]

yes it is a scam, unless you're cool with monthly checks. monthly checks will only get you a small amount, but the entire amount eventually including the match. lump sum is almost like they took their match back and that should be criminal.

[jamesgoldman]

You pull the cash out during it's effectively biggest earning era, they don't like that hence I don't trust anyone else with my money

[blondfrog]

I know part of me feels like I made a mistake enrolling my checks into a 401k.

[Anonymous]

I'm not sure what you mean by 30% penalty. Are you referring to the 10% early withdrawal penalty plus normal income tax?

[blondfrog]

Yes that

[Opinion Owner]

Well taxes are inevitable, ask Ben Franklin. And you'd pay that whether you chose to invest in retirement now or not. But avoiding the 10 penalty isn't that hard. Simply don't withdraw it early. If you absolutely need some of that money early open a SEPP plan and you can avoid the penalty. But do this as an absolute last resort.