I have to take money out of my 401k about 50k I;m 60 years old, witch is better borrow it or withdrawl.?

Answer 1

The best alternative is to look for another option! But if you withdraw the money, they will take a flat 20% out of it. Since you are older than 59 1/2, you won't be subject to any penalty for early withdrawal. But if you borrow the money, then you have the option of paying it back (and any interest you pay goes straight into your account). Of course then you will have a loan payment to make. You'll just have to decide what is best for your finances.

Answer 2

Because you are over 59 1/2, you are not subject to the 10% penalty for early withdraw. You will income tax on a withdraw at the same rate as if you earn that amount on top of your regular income. If you are still working for that employer, your plan may not allow withdraws. If you are no longer working for them, the tax law does not allow you to take a loan.

Answer 3

Another thing to consider - when you borrow or loan from your 401(k), you (usually) borrow pre-tax money, but when you re-pay the loan, you (usually) pay after tax into your account (check with your plan, most employers have automatic loan repayments from your pay check, on an after tax basis). Generally, the repaid money is not kept separate from your standard pre-tax contributions and interest, so when you withdraw at retirement or separation from service, you pay taxes again on the repaid money.
Remember too: when you withdraw (not loan) the money counts as income for the year. So while 20% is withheld (usually at the time of withdrawal), you may pay more at tax time. If you are seriously considering withdrawals from your 401k, seek advise from your CPA or tax professional.