2006-08-02 15:50:53 · 6 answers · asked by Curious to Learn 1 in Business & Finance ➔ Personal Finance
Don't pull it out...you'll likely pay 10% penalty plus taxes on the capital gain.
A loan against the 401(k) is an option since the interest charged these types of loans actually gets credit back to your account. So, it "costs" nothing except the opportunity cost of having it not grow.
Another option is to look for grants or check if you employer offers any tuition reimbursement. Combined you might be able to work the hours necessary to pay as you go at night classes.
Good luck.
2006-08-02 16:06:47 · answer #1 · answered by dm_dragons 5 · 0⤊ 0⤋
Have you looked into taking out a 401k loan? That way you can have funds available now, but pay back slowly, over time. You may get a tax credit for Hope or Continuing Education, but you'd probably still be stuck with the penalty if you pulled it out now.
2006-08-02 15:59:16 · answer #2 · answered by MrsBenji 1 · 0⤊ 0⤋
If you are still employing, the best possible solution is taking a loan. The max amount you can take out as a loan by IRS rule is 50K. The tricky part is, if the company downsize while you borrowed, the company requires you to pay the loan back 60 days in full or as distribution(that when high tax and penalty kicking in)
2006-08-02 19:43:26 · answer #3 · answered by Hoa N 6 · 0⤊ 0⤋
I'm not sure. But one suggestion is transferring the amount needed for education from the 401K into a tax free educational fund. It should limit your liabilities.
2006-08-02 15:56:13 · answer #4 · answered by mikis1967 3 · 0⤊ 0⤋
First how much money do you have in 401k then are you able to take a lone out of it if so take it out of your 401k then u pay yourself back with interest
2006-08-02 15:58:37 · answer #5 · answered by speddy 3 · 0⤊ 0⤋
As I recall, the only thing that money can be used for is preventing foreclosure on your home, catastrophic medical bills without the penalties.
2006-08-02 15:58:31 · answer #6 · answered by vadragonslayer 3 · 0⤊ 0⤋