Withdrawl from 401K...?

Question

Am I correct in assuming that at 59 years, 6 months old, you can make a withdrawl from your 401K without having to pay it back???

(of course, you'll have to pay tax on the withdrawl, I'm aware of that)...

Thanks for any help you can give!!

Answer 1

You actually have more loopholes than what are currently mentioned. Keep in mind, any withdraw will be treated as income for the year you withdrew it, but there are some ways to avoid the 10% penalty.
1. Withdraw for a purchase of your first home.
2. Show medical or unemployment hardships.
3. Die and have it go to your beneficiaries (ha)

or 4. Just borrow from it and pay it back. That way the money isn't tax or penalized and the interest you pay back actually goes back to you.

If none of these options are for you, 20% will be held from the company before the give you the rest of the money. 10% of that goes toward the penalty and 10% goes towards your taxes you will owe next year. Keep in mind that 10% normally isn't enough, but you get the rest of the money. Be smart about it!

Answer 2

Yes, theres a loophole;at age 55 if you start -- you can take the same amount every year until 59.5

Also - If you are vested in the job, money there may be limited to certain balance restrictions. You may want to investigate converting a 401k to an IRA.

Answer 3

That is the age you can withdraw it without a 10% penalty. You can take it out earlier with a 10% penalty.