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Ha! Just kidding. Unless it’s a dire emergency, no one should consider touching that 401(k) because it’s tantamount to robbing your future self… and your future self would be pissed. So why did 45% of a 200k polled by Hewitt Associates ^[3] opt to take the cash after leaving work? Perhaps it’s because they don’t know the ramifications (it’s taxed as income and then you’re nicked for a 10% penalty!) of their actions? If you look at the dollar amounts it’s even more staggering: if you’re 401(k) value is under $10,000, that little devil telling you to raid is three times fatter than the angel! (72.5% take it out).

This defies reason, especially the final stat: With only $10,000 and assuming a 25% tax rate, we’re talking a tax of $3,500 on $10,000. You only get $6,500 bucks to spend now… that’s a huge tax hit to be taking now on money you should’ve programmed yourself to forget.

Another interesting statistic, showing the general financial immaturity of the 20-29 age group, is that they’re the most likely to raid the kitty (of course, we do need the money, right?) compared to older folks. Those who cringe should take heart, 32% keep everything status quo after leaving a job and 23% roll them over.

This reminded me of a friend who wanted to raid the 401(k) to buy a boat, luckily his future self won out and he didn’t, but he would’ve been pissed when the rest of us were sipping martini’s on our yachts (ha!) and he was stuck with his 40 year old dingy.