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Hi all. I've diligently searched previous posts for my answer but I still have questions, specific to my case.

I'm 26. I left a company a year ago, and just recently received communication from the third party administrator of the profit-sharing plan for this company. I have $5,000 vested. I had thought a 401k and a profit sharing plan was synonymous but I might have been wrong all along.

My current company does not have any 401K plan, though tentatively might have one this January.

My questions are:

1. If I choose to cash out, I will get taxed a total of 30%, yes? Meaning I would only get a check for only $3,500?

2. I'm thinking that since the amount is small, I'd be better off cashing out. I can use the funds to pay off some debts and pay off next semester for my college. Would this be prudent judgment or should I instead take the view that any amount is good to get me started on a retirement plan, therefore I should roll the funds over?

Thanks in advance!
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