what is a 401k plan? Can you get the money out of the plan at any time?

Answer 1

401k plan is a retirement plan sponsored by your employer.

money comes out of your paycheck tax free to fund it.

when you are 55 and retire, you can withdraw money from the plan (paying taxes, etc.) however, if you take money out before 59 1/2 and not retired, you have to pay tax, and a 10% penalty. after 60, you can withdraw from it retired or not.

you can also withdraw from a 401k withwhat's called a "hardship withdrawal" if you are 1) buying your first house; 2) paying college for yoru spouse, or kids 3) certain types of medical expenses 4) to prevent eviction, or foreclosure of your own home.5) pay for funeral expenses, or repair of your house.
whether you pay penalties or not is complicated. read this
http://www.401khelpcenter.com/mpower/feature_121902.html



you can also withdraw money, by borrowing money against the 401k. it's basically a loan with your 401k used as collateral.

Answer 2

A 401k plan is for retirement savings - since you may never see any social security when you reitre. Although it is possible to get money out of the your 401k plan ---Never, ever borrow money from your 401k - get a loan instead.

To supplement your 401k - get an ING account or money market where you can earn great interest on your money, but still have access to it anytime you need it.

Answer 3

A 401k plan is a personal pension plan. You decide how much money each period you put away - pre-tax - up to a certain amount per year and it remains your money. However, if you withdraw money from the plan, you must pay the income taxes on it and then replace it in your fund. Talk to the human resources people at your employer. Or, see http://www.fool.com/money/401k/401k.htm

Answer 4

A 401k is a retirement savings plan with tax benefits. In general, you can not take out money until you reach retirment age.

Answer 5

401K is supposed to be a supplement to your pension. Yes you can get money out when you want but there are restrictions. You will have to pay a 20% penalty for withdrawal and then you can't take more money usually for about 3 months.

Answer 6

If your employer is willing to match your contributions....it is almost always prudent to put at least the maximum they match because you can almost ensure a 40-50 % return as long as you plan on staying with the company and having their match vest. Roth IRA is annother alternative and its easier to take money out without penalties for first home purchases, medical expenses etc.

Answer 7

in addition to janet if you borrow money from it and you lose or quit your job the money must be paid back immediately or there can be serious consequences. a great place for financial advice is www.daveramesy.com he is a radio guy out here in Nashville and has been on Oprah and several other shows.