I want to withdraw my 401K money, how much will I lose if I withdraw? What is vested balance? If I go ahead to withdraw, can I withdraw the original balance or vested balance? Thank you.
2007-12-26 11:20:23 · 6 answers · asked by Anonymous in Business & Finance ➔ Personal Finance
I'm only 38, since I lost my job I need money until I get a new one. Also, I'm an immigrant and my future is not here. Going back to Italy. Thanks.
2007-12-26 11:50:23 · update #1
If you withdraw early you will be penalized. You can talk to whoever manages your 401k and they can give you all the options. You can also borrow money against your 401k, but I hear that can be a bad idea.
2007-12-26 11:23:49 · answer #1 · answered by Anonymous · 1⤊ 1⤋
How old are you? If you are doing a rollover, there is no penalty. It would be best to consult a professional.
"Definition: A 10% penalty that is charged in addition to regular income taxes for the early withdrawal of assets in a 401k plan. A withdrawal prior to the age of 59 1/2, retirement, disability or death is considered an early withdrawal and is subject to this penalty."
2007-12-26 19:32:24 · answer #2 · answered by hamrrfan 7 · 0⤊ 0⤋
You don;t mention your age... If you are 59 1/2 or older there is no penalty, just taxes.
Withdrawing money from 401k is a very bad idea.
You will pay the taxes on the withdrawal, the bracket will be your regular wages plus the amount withdrawn. Meaning your regular wages will be taxed at a higher rate, which will come out of your proceeds. You will also pay a penalty, I believe it's 10%. So assume 35% plus an extra 8% on regular pay.
Taking a loan is also no good because you lose the tax advantages.
If you'd like to discuss further, send me an instant message.
2007-12-26 19:35:51 · answer #3 · answered by beckoningsubstitutes 5 · 1⤊ 1⤋
Jim D is right. There is a 10% penalty for the early withdrawal, AND you have to pay income taxes in addition (because the money was not taxed when you earned it.) It's better to leave it alone. But don't take my word for it - talk to the plan administrator.
2007-12-26 19:31:33 · answer #4 · answered by siamesedharma 7 · 0⤊ 0⤋
If you plan to retire poor go ahead and withdraw. $401K is for the purpose to be you life support when you retire. Never never good idea to withdraw your 401K
2007-12-26 19:29:56 · answer #5 · answered by Goodhead 3 · 0⤊ 0⤋
If you are still working for this company, you probably can't withdraw money unless there is a hardship. (Check with the plan administrators.)
The vested amount generally applies to employer matching funds.
2007-12-26 19:28:35 · answer #6 · answered by Anonymous · 0⤊ 0⤋