trdconsult
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Speak to your HR department. Most 401k plans allow you to borrow from the fund and then pay it back over time. There isn't a tax penalty for doing this, but you lose the benefit of having that $$$ in the market while it is loaned out.
edit: I just saw your additional details. No, your only option is to withdraw it. You will pay taxes on it for this year (payable in 2009), plus a 10% penalty. The administrator of the fund will do withholding on the distribution, probably 40%, so net in your pocket will probably be 60% of the balance, with another 10% gone to the gov't, and the additional 30% figured into your 2008 taxes in April of 2009. |
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Doctor Deth
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if you don't work there, you can roll it over to an IRA, but you'll have to pay taxes and 10% early withdrawal penalty for anything you pull out of the IRA and keep out - figure on losing 1/3 of whatever you withdraw |
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Annick J
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You should be able to withdrawl, but you will pay a tax penalty. Your banker should be able to give you more details on exactly what taxes apply. |
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Gary
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A 401k plan is not a regular savings account. If you take money out for a move then you are going to be hit with a 10% penalty plus the money that you will get will be fully taxable. When you get your next job just transfer your 401k money to your new retirement account without touching the money. By the way, moving expenses is tax deductible if you move more than 50 miles. |
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bdancer222
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You cannot borrow against your 401k if you no longer work for that employer. You should rollover that 401k into an IRA.
In any case, you will have to pay the 10% early withdrawl penalty and income taxes. They will withhold about 30% all together. |
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Amber G
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I would speak to your HR department at the company, I know that it can be done but at the end of the year you will be paying money for taxes on it.
Good luck with everything hope all goes well with the move... |
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raymo73
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You'll need to contact your 401k provider and let them know you want to make a withdrawal. You will get penalized like 10% for the early withdrawal and then have to claim it as income on this years tax return.
Good Luck |
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d_rangler
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i believe ya gotta pay 10% penalty of the amount you withdraw, check with you 401 holder |
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Doctor J
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You can take it out. You will pay a 10% penalty for early withdrawal and ordinary income taxes on the amount withdrawn. This is a high penalty to pay!
Moving expenses are not really an emergency (unless you are needing to 'escape' from an abusive/dangerous situation). I wouldn't sacrifice your future retirement income by taking money out of your 401K to move. Find another source of money (credit cards, family loan, etc.), find a way to reduce your moving costs, or ...? |
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Dan A
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Depends on the company and the plan.
At one place I worked at, the only way you could withdraw money from the 401k was to quit the job (because of matching funds was how it was explained to me.)
There is possibly another answer. The managing fund might loan you up to 50% of what you have in the 401k plan at a reasonable interest rate. It is a secured loan from their point of view and you don't have to deal with all the taxes mess and hassel.
Good luck |
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Mattie J
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I agree with everyone who said you will take a huge tax penalty if you take the money out.
However, I want to suggest that if you no longer work for that company you should look into rolling the money into an IRA--Individual Retirement Account until you can move it into your next employer's 401k. (Unless you immediately qualify, then just move it directly from to the other.) That way you won't take any tax hits, and you won't have any ties to your old employer. |
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John S
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Yes you can - but do it as a loan. Here is how it works. You can take out up to 50% of your money (without penatly) as a loan for emergency purposes. Then you pay back the loan to your self on a monthly basis (+ interest) that all goes back to you. If you just take your money out for an emergency you will pay penalties and taxes. Which can be very costly |
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♥ hello ♥
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I think you can, but you will be penalized |
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ACEY
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SINCE YOU DONT WORK FOR THEM ANYMORE YOU CAN CASH IN THAT 401K BUT YOU WILL HAVE TO PAY THE FEDERAL GOVERNMENT AN XTRA 20% INCOME TAX PENALTY FOR EARLY WITHDRAWAL |
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Sister Girl
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Yes, you can borrow for an emergency. I got mine in just a few days - direct deposit in my checking account. I was a Fed at the time and therefore I payed it back in increments every pay period. Now that I am no longer employed due to an unforeseen situation (at the moment - not retired) with no pay periods, they (Thrift Savings Plan) sent me a statement asking if I wanted to pay the remainder which was approximately $1900 or have it count as part of my 2007 income. Since I cannot pay it back by 3/2008, I am going to let them tax me as part of my 2007 income. I am no longer eligible for loans because of my employment status but I can take some out but I will be taxed about 20 percent of the amount.
As long as you are working, you will pay it back with interest but think of it this way, you will be paying yourself back what you borrowed from YOU and the interest will be repayed to YOU and no one else. I also think as long you you pay it back you don't have to claim it on taxes because it is a loan. Check and question this last statement of mine. Even if you had to pay taxes on it, $1,000 is not a lot to push you into an outrageous tax bracket.
God bless |
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Emo
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Since you are no longer employed with the company you cannot take a loan. However you can take a distribution of your total account balance. You can rollover your account to an IRA to keep it tax free which means there are no taxes or penalties to worry about. Once it's in the IRA and you decide to take money out take as little as you would need, since yes it will be taxable (it will increase your taxable income when you file your taxes) and yes if you are under 59 1/2 you will be penalized 10% when you file your tax return (there is an exception if you 55 or older at the time you separated service) |
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S&yW
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You may be able to withdraw 1/2 of the account and you will have to pay taxes on that, as it will be considered income as it probably was taken out pre-tax from you check. You need to contact your HR Dept and fill out the paperwork. |
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krisaquarius
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That is up to the executor of the 401k account where you work |
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Steel Warrior
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You can but you won't get the full amount. They'll take a certain percentage. I'm also not sure if you can take a certain amount out or if you have to cash the whole thing out? |
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blueguitarpicker
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You can borrow up to 1/2 of what you have in your 401k. There is no penalty, but it is a loan and you have to pay interest on it, although it is a very low rate. And you have to keep contributing to it and make the loan payments at the same time. |
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A_Moron
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Yes, you can take a loan against it (best option). If you take it out, there is a 50% tax on it, so its best to take the loan. |
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