Getting out of a 401(k)

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.