Not all companies participate in 401(K) plans and you’re one of the luckier ones if you have it. The earlier savings is started, the more time the money will have to earn interest. Leaving it to grow in a defined contribution plan such as the 401 (K) plan lets you benefit from the advantages of compound interest towards building the retirement nest egg.
It is possible to cash out this plan but there are disadvantages in doing so. Federal and state taxes as well as withdrawal penalty will have to be paid. Most importantly, the opportunity to increase the amount of money contained in a tax-deferred account is lost.
