I am thinking about moving overseas to Europe in the next 3 months and will not be returning the near future, and am wondering how that affects my 401K here in the US? Can I withdraw all the money or am I going to lose a lot of it to taxes and my employer due to their contributions? I also have a loan out on it with a while to go on it before it's paid off! What are my options? Sensible answers please. Thanks!
2007-10-22 05:24:02 · 3 answers · asked by Curious In Ohio 2 in Business & Finance ➔ Personal Finance
You'll only be taxed on the value of the loan if you quit. You'll be taxed at your regular tax rate PLUS 10%. The rest of the account you will not be taxed on unless you take a cash distribution. If you roll it over into an IRA you will not be taxed on it and if you leave it where it is you won't be taxed on it. If you do withdraw it you will be taxed on your normal tax rate PLUS 10%.
How much of your employers contributions you retain is dependent upon how long you've been employed and what the vesting schedule is. You've provided information regarding neither in your question.
2007-10-23 02:35:26 · answer #1 · answered by digdowndeepnseattle 6 · 0⤊ 0⤋
Your 401(k) loan will be due within either 30 or 60 days of leaving the company.
If you cash in your plan you will pay taxes AND a penalty on it.
It's not a great move. You should have read the fine print on the 401(k) loan before you took it!!
Good luck!
2007-10-22 15:34:30 · answer #2 · answered by Rush is a band 7 · 0⤊ 0⤋
Well if you take all your money out you will be taxed on it. and since you weren't taxed on your loan, you may be taxed on your balance on the loan as well. If you have alot of money in your 401K, to where your not worried about the deductions then go for it.
2007-10-22 12:51:07 · answer #3 · answered by TNA Ambassador 6 · 0⤊ 0⤋