Cashing out 401k to buy rental property

[Seann Brown]

Have $100k In my 401k, would it be wise to cash out the entire amount for a rental property? What would be the tax implications? I live in CA. I know I would pay the tax on it now, but it was all tax deferred contributions any way and I’m going to pay the tax when I retire.

[George Blower]

@Seann Brown

401k distributions are subject to both federal and state taxes. Also, an additional 10% early distribution penalty applies if you are under age 59 1/2 unless you meet the age 55 exception. 

Please see the following regarding the distribution rules.

https://www.irs.gov/retirement-plans/plan-particip...