Liquidating your 401k account geek love dating
This is their wording: You can take a distribution from a qualified defined contribution plan, i.e. A couple key things to note on doing this is that it must be from the 401(k), 457 or 403(b), to avoid the 10% penalty.
This actually happened to my father in law as his company went through a buyout and he was offered an early retirement package at the age off 55.
If you are stressed about having to pay the 10% early withdraw penalty, don't freak out just yet.
The IRS – believe it or not – does allow methods to withdraw funds from your 401k without penalty.
In other plans, you may be able to designate which investments you’d prefer to tap to put together the total amount.
Before you determine whether to borrow from your 401(k) account, consider the following advantages and drawbacks to this decision.
And if you think that I had to tap my 401k to pay for my son's emergency room visit, get your head out of the gutter.The only exception occurs if you’re using the money to buy a primary residence—the home where you’ll be living full time.In that case, some plans allow you to borrow for 25 years.But while taking a loan or a hardship withdrawal may help solve an immediate need, there can be consequences that may reduce your long-term financial security.