what will they do to me if i take all the money out of my 401k early?

Answer 1

Assuming you've left your job where the 401k is at (can't take it otherwise), you will be taxed on the amount and they will apply an extra 10% tax. These taxes will be applied when you file your taxes. However, when you take the distribution they will withhold 20% of it to pay for these taxes. Depending on the size of your 401k you may want to set additional funds aside to pay for the extra taxes.

Now, that's what THEY will do....but the real problem is what you will do. Do you realize that for a person that is 30 years old with 10k in their 401k that even if they don't put any more in the account it will grow to about 100k at age 67. So, if you're planning on buying something with it make sure that you want it reeeeeal bad! The ONLY reason you should take any money from your 401k (ie not roll it over) is in the case of an extreme emergency and you have no alternative sources. Even charging on a credit card is better than this.

Answer 2

Unless you quit the job where you have your 401K account, you can't take your money out. However if you do and don't reinvest it..there is the tax you have to pay as well as a very stiff penalty for taking it early.

Answer 3

Make you pay penalty tax then tax you at the end of the year as money earned. Also, most 401k's you just can't take the money out-you have to have a reason.

Answer 4

Normally the penalty for early withdrawal is 10%. Of course, that is on top of the normal income taxes you will have to pay on the money withdrawn. This could bring your tax liability on these funds to around 50%.

I would only do this as a last resort.

Answer 5

The amount is immediatly subject to tax at your marginal rate and there is a 10% penalty.

Investigate a loan from your 401k before you do this.

Answer 6

tax u and possibly have to pay penalty