2007-01-31 02:24:31 · 6 answers · asked by Lew L 1 in Business & Finance ➔ Personal Finance
The IRS charges a 10% penalty on top of taxes owed.
In addition, some plans charge a fee for early withdrawal as well.
2007-01-31 02:31:01 · answer #1 · answered by Colin M 3 · 0⤊ 0⤋
Depends on your age. If you make a withdrawal out of a 401(k) prior to the age of 59 1/2, then you pay a 10% penalty and income taxes.
Most 401(k)s allow loan to be taken out which can avoid those penalties. If you have left your company, then roll your 401k into an IRA and then you can pull out money.
2007-01-31 02:34:58 · answer #2 · answered by MR MONEY 3 · 1⤊ 0⤋
10% of the amount not rolled over...but there are exceptions.
basically if you term/quit/retire after you've reached age 55 then you can take it out.
OR
If you take equal payments based upon your life expectancy and don't change those payments until the later of 5 years or 59 1/2.
or
die or become permanently disabled
or
receive a QDRO distribution in a divorce settlement.
2007-01-31 07:56:50 · answer #3 · answered by digdowndeepnseattle 6 · 0⤊ 0⤋
When the money was deducted from your paycheck to be put into 401K,you never paid the taxes on that money or the money your employer added to yours...When you pull out early,it's time for you to pay up.
2007-01-31 02:35:52 · answer #4 · answered by oohJOHNNY 2 · 0⤊ 0⤋
I paid a 10% withdrawl fee. It really adds up.
2007-01-31 02:30:23 · answer #5 · answered by Big Bear 7 · 0⤊ 0⤋
10% of the amount taken.
2007-01-31 02:28:28 · answer #6 · answered by Anonymous · 0⤊ 0⤋