i have a 401k from my last job thats still sitting there, i just went extrememly broke with helping my family last month, and i thought we were ok but for some reason we're not and bills are bouncing even my mortgage!! I'm wondering how it works for me to withdrawal money from my old 401k? should i take it all or is there a way to take some of it? and what are the penalties i know theyre extremely bad btu im desperate and this is my LAST resort!!!
2006-07-24 02:35:52 · 8 answers · asked by toolate 3 in Business & Finance ➔ Personal Finance
and another thing..do i go through my hr from my last job to do this or go through Fidelity?
2006-07-24 03:45:17 · update #1
I took my 401K when I lost my job and they took a FORTUNE out in taxes. Plus, when I go file my taxes next year, I'll have to claim the full amount BEFORE the taxes came out as income. But like you, I had no choice. I paid my home and my car off, but it sucks not having any retirement anymore at my age. If there's any possible way, try not to do it. You'll lose thousands of dollars (depending on how much you have in there) Good Luck
2006-07-24 02:41:51 · answer #1 · answered by sparkie 6 · 0⤊ 0⤋
Try to avoid taking money from the 401K as the tax penalty is hefty about 25% since you never paid Uncle Sam for the money. In the future try having a ROTH IRA so you can withdraw money without the penalties. Try donating blood or plasma for money or having a yard sale. Good luck with your situation...this too shall pass.
2006-07-24 09:45:29 · answer #2 · answered by Ms. Dorsey 3 · 0⤊ 0⤋
I had the same problem when I was downsized about 2 years ago. You have a couple of options. You can cash it out and just get all of it, or you can roll it over into an IRA. If you only roll part of it over you may owe taxes on the entire amount depending on what it is.
There is an automatic 10% penalty to take it out and they tax it at at least 20%. Also depending on how much is in there, you could end up in a higher tax bracket at the end of the year and end up owing even more money to the IRS.
Once you make the decision it can take about 2 weeks to get your check.
feel free to contact me if you have any questions about my experience. Good luck!
2006-07-24 09:43:06 · answer #3 · answered by emilysmoma 3 · 0⤊ 0⤋
You can take half out as a loan from yourself. You can pay it back monthly without penalty. You can get out of the 401k program but the penalties vary. You need to talk to someone in your HR dept about your possibilities.
2006-07-24 09:40:53 · answer #4 · answered by ttjakt 6 · 0⤊ 0⤋
Actually the penalties aren't that awful and range from 10-15%...yes you may/might be able to take a partial distribution. Was the issue a documented health expense? If so you may be exempt from any penalties. Advise you consult your CPA or Financial Professional (assuming you have one). PEACE!
2006-07-24 09:39:26 · answer #5 · answered by thebigm57 7 · 0⤊ 0⤋
You may be able to borrow money using the 401K as collateral.
2006-07-24 09:39:57 · answer #6 · answered by Rich M 3 · 0⤊ 0⤋
I know someone who took theirs out. IRS taxes about 30%. See if you can take a loan out on it. You might have to move it from your company and set up a new one.
2006-07-24 09:39:17 · answer #7 · answered by Anonymous · 0⤊ 0⤋
If you can prove financial hardship there is no penalty..Only tax
2006-07-24 09:40:30 · answer #8 · answered by dwh12345 5 · 0⤊ 0⤋