I was recently laid off from my job and I will be receiving my 401K money. I am in the mortgage business so I am having a very difficult time finding a job. Is there anywhere I can put this money so if I have to access it I can and avoid the 10% penalty for early withdraw?
2007-09-19 11:12:07 · 4 answers · asked by Anonymous in Business & Finance ➔ Personal Finance
No, you do not want to take that 401k in cash at all. Roll it over into an IRA. If the money comes to you, you will get to pay not only the 10% penalty but income tax on the whole thing.
2007-09-19 11:20:08 · answer #1 · answered by bdancer222 7 · 0⤊ 0⤋
The only thing I can think of is take any job that has a 401k, roll your current one into it, and take a loan. Of course, this is not an ideal solution -- you would have to make sure that you could participate immediately (at least for roll-ins) and that you could take a loan during the probationary period as well. But at least this way you could take an entry level position somewhere (even some restuarant chains have 401ks) while looking for a job in your currently ailing industry, and still be able to access the money without penalty. Not that I recommend doing this -- just an idea, and one that requires you are absolutely sure of your options first.
2007-09-19 18:26:13 · answer #2 · answered by matthew h 2 · 0⤊ 0⤋
Yes, there is one way, of which I am aware. If you have a job in which you receive schedule C money, i.e. you are self-empoloyed, you should qualify for an individual 401-K plan, called "Uni-K" or maybe "solo 401-k". You may then take a loan on a significant portion, I believe up to 50%, though you should ask your tax advisor to be certain. The loan must be paid back within 60 months, but it is a loan to YOUR account, at Prime interest rate, which will additionally increase your investment account. The borrowed funds can then be used for current projects, such as homes, business start-ups, etc.
However, you should be aware of the penalties that may then be incurred if the loan is not paid back as scheduled.
2007-09-19 19:37:42 · answer #3 · answered by joeiselvis 3 · 0⤊ 0⤋
Even if you roll it over into a money market account, you will eventually have to pay some type of penalty for withdrawal. But the easiest place to get to it is in a money market account, at least from what I have found.
2007-09-19 22:26:03 · answer #4 · answered by wife2denizmoi 5 · 0⤊ 0⤋