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    darsenault's Avatar
    darsenault Posts: 5, Reputation: 1
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    #1

    Aug 7, 2009, 07:22 AM
    Early withdrawal of 401K
    Will I be taxed the additional 10% for early withdrawal of 401K, if I am unemployed, and own my own home, and need it to survive?:(
    ScottGem's Avatar
    ScottGem Posts: 64,966, Reputation: 6056
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    #2

    Aug 7, 2009, 07:40 AM

    Unless you were over 55 (I think) when you were terminated, then yes.
    darsenault's Avatar
    darsenault Posts: 5, Reputation: 1
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    #3

    Aug 7, 2009, 08:08 AM

    Thanks it just stinks that in this economy and trying to do what you need to - to survive, that they will take additional money!

    Thanks again
    ScottGem's Avatar
    ScottGem Posts: 64,966, Reputation: 6056
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    #4

    Aug 7, 2009, 08:24 AM

    You have to understand that you receive tax breaks to contribute to the 401(k). Its not a saving vehicle but a retirement vehicle. They don't want you using up your retirement money now.
    IntlTax's Avatar
    IntlTax Posts: 831, Reputation: 23
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    #5

    Aug 7, 2009, 07:22 PM

    If bankruptcy is a possibility in the future, you may not want to touch your 401(k) funds. I believe that if you have funds in a 401(k) when you declare bankruptcy they cannot be taken away. On the other hand, if the funds are not in the 401(k), they can be taken away.

    Just an idea. You may want to speak with a bankruptcy attorney.
    darsenault's Avatar
    darsenault Posts: 5, Reputation: 1
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    #6

    Aug 8, 2009, 06:43 AM

    I have no reason to declare bankruptcy and do not want to go through that course. It is just at the current time being unemployed I am only receiving 50% of my salary. Thank God I had a bank account which is coming in handy but dwindling. I guess I am just trying to seek out all my options in the case I am not soon gainfully employed. I have owned my own home for 15 years and would like to keep it that way. Thanks all for the help!
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