Ask Me Help Desk - Age 591/2 can I take my 401k money

Age 591/2 can I take my 401k money

Without being taxed

You can take your money all right, but you will have to pay taxes on any withdrawals of money that you didn't already pay tax on - for most 401(k) participants this means that you pay ordinary income tax on virtually the entire amount of the withdrawal (the exception is if you have any "after-tax" money in the plan). The good news is that because you are 59-1/2, you will not have to pay any additional penalty for early withdrawal.

I'm 63 and I have a 401k . I was thinking of cashing it in so I could pay off an credit card and get it out of my mind. Do you think this is a good ideal?

Would it be wise to use 401k money to pay off high interest debit

Quote:

Originally Posted by dcamp

would it be wise to use 401k money to pay off high intrest debit

How old are you? Specifically, are you either 59-1/2, or do you have a 401(k) with an employer you left at age 55 or later?

I am 64 1/2 I am on partial SS and want to know if I will pay any penalty on taking my 401k to pay off a high interest debt or credit card?

Part64 - you will not have to pay the early withdrawal penalty, as you are over age 59-1/2, but you will have to pay ordinary income tax on any withdrawal - both federal and state/local (if applicable where you live).

Can you make partial withdrawal after 59 1/2?

Can you make partial withdrawal after 59 1/2 without hardship and without cashing out, and not a loan

Quote:

Originally Posted by Amyruth

Can you make partial withdrawal after 59 1/2 without hardship and without cashing out, and not a loan

If you are still an active empoyee it depends on the terms of your 401(k)plan. Some plans allow active employees over age 59-1/2 to take a partial withdrawal, but many do not. Ask your plan admin what the rules are.

If you are no longer with the company then yes, you can take a partial withdrawal at any time. Being over 59-1/2 means you won't have to pay the10% early withdrawal penalty. But of course you will have to pay federal income tax plus state/local income tax (if applicable).

I need help.. I am losing money from my 401k.. will retire at 66 am 63 now.. I want to pull all my money out
And put in a savings account.. will there be any taxes,fee,or penalties.I don't have time to let the amt grow and I can't keep losing money.. help
I live in ct

caugust - as noted in the earlier posts in this thread your plan may not allow you to make a withdrawal since you are still an active employee. Some plans allow active employees to make withdrawals, but many do not. So you need to ask at work whether you can take a withdrawal or not.

If you do take a withdrawal my suggestion is to make a direct rollover to an IRA. That way you won't owe any taxes on it. You can easily find an IRA investment that will be very conservative - similar to a savings account. Of course it won't yield much, but it will be safe. If instead of a direct rollover you actually take a cash withdrawal from your 401(k) you will owe income taxes on it - federal as well as state/local (if applicable where you live). That's why if you don't need the cash right now it's better to do a rollover to an IRA.

However - if finding a safe investment is all you're concerned about have you looked into all the investment optins that your 401(k) plan has to offer? Most plans include some pretty conservative investement options - something like T bills, or just plain cash. Since you apparently don't need the cash right away simply changing investments in your existing 401(k) plan would be the easiest thing to do.