When you retire or leave your company, you can leave your 401(k) invested as it is, roll it over into another retirement account (such as an IRA, which I talk about in the section “Investing in Individual Retirement Accounts,” later in this chapter), or withdraw it. People usually face some penalties and an income tax liability for withdrawing the money. You can claim funds from the 401(k) without a penalty after age 591⁄2.
When you’re in your 20s and 30s, retirement may seem impossibly far off — so far off, in fact, that it’s hard to imagine planning for it now. However, start saving for your retirement, and the sooner the better. In 1998, the Social Security Administration estimated that Social Security will provide less than a quarter of the amount you’ll need to pay for housing, food, and other living expenses in your retirement. If you want to retire in comfort, you will have to provide for yourself.
When you’re in your 20s and 30s, retirement may seem impossibly far off — so far off, in fact, that it’s hard to imagine planning for it now. However, start saving for your retirement, and the sooner the better. In 1998, the Social Security Administration estimated that Social Security will provide less than a quarter of the amount you’ll need to pay for housing, food, and other living expenses in your retirement. If you want to retire in comfort, you will have to provide for yourself.
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