Ask Experts Questions for FREE Help !
Ask
    gary jordan's Avatar
    gary jordan Posts: 1, Reputation: 1
    New Member
    		  
    #1

    Feb 6, 2010, 05:53 AM
    Penalty for withdrawing 401k
    I am 71 and still working. What is my pennalty for withdrawal? I do not like rumors of Uncle Sam wanting to tell me where to invest my money for continuous retirement income.
    MukatA's Avatar
    MukatA Posts: 7,110, Reputation: 176
    Tax Expert
    		  
    #2

    Feb 6, 2010, 05:59 AM

    There is no early withdrawal penalty at this age. The withdrawal must be reported as income on your tax return. Your U.S. Tax Return: Elective Deferrals 401(k) Plans
    ScottGem's Avatar
    ScottGem Posts: 64,966, Reputation: 6056
    Computer Expert and Renaissance Man
    		  
    #3

    Feb 6, 2010, 06:37 AM

    I'm curious about what rumors you are hearing. 401(ks) are self directed within the investment options offered by your employer. I have not heard anything about changing that.
    ebaines's Avatar
    ebaines Posts: 12,131, Reputation: 1307
    Expert
    		  
    #4

    Feb 8, 2010, 08:10 AM

    ScottGem: I believe the OP is referring to internet rumors about a statement that Obama made a week or two ago. He suggested that retirees should consider investing a portion of their 401(k) or IRA accounts into traditional annuities - to remove risk and provide the retiree with a steady stream of monthly income. It's good advice. I'm not saying annuities are appropriate for all, but they are certainly prudent to consider, especially for those retirees who do not get a pension. His administration is also looking into possible tax breaks for annuity investments - perhaps waving income taxes on the first $10K of withdrawas per year. Now, the internet being the crazy place it is - this gets been blown out of proportion to suggest that Obama is going to force people to invest their retirement account in annuities. Ain't true, but that doesn't stop the hysteria.

    See the following article from the NY Times: Your Money - The Unloved Annuity Gets a Hug From Obama - NYTimes.com
Not your question? Ask your question View similar questions
 

Question Tools Search this Question
Search this Question:

Advanced Search

Add your answer here.


Check out some similar questions!

Penalty on withdrawing money from an IRA [ 20 Answers ]

Hi, In 2008 I withdrew about $6000 from my IRA to help pay for living expenses and some educational expenses. I was told that I may have to pay a 10%penalty for early withdrawal. However, that was my only source of "income" in 2008 (I have no W2 forms for 2008 as I did not work). I also took out an...

Withdrawing from 401K [ 2 Answers ]

If my husband and I took some money out of our 401k early to purchase land so we can build and start farming should we be penalized that 10%

What are the taxes and penalty of withdrawing from a 401k plan? [ 4 Answers ]

What penalty and tax rate would I have to pay if I cash in a 401k plan?

Penalty for withdrawing before age 591/2 [ 1 Answers ]

Is the penalty applied before any month you turn 591/2 even though you turn 591/2 during the tax year? As an example I tune 591/2 in Jun of 2008, Does that mean any payments made to me before June 08 are penalized even though I turn 591/2 in the tax year? Basically is it the month or the year...

Withdrawing off my 401k? [ 2 Answers ]

First... I have 2 different 401ks. Should I roll these together before I withdraw or withdraw them separate? Second... how to I go about getting started? Is it paper work? If it is where to I get this paperwork? Anyone might be able to help... much appreciated. Thanks Steve

View more questions Search