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    semper's Avatar
    semper Posts: 1, Reputation: 1
    New Member

    Dec 22, 2005, 04:54 PM
    401k withdrawl
    I am recently divorced and have to withdraw from my 401K in order to make a down payment on a house. I am also in the military and will be deploying to Iraq shortly. Question: If I cash in the 401K when I am in a tax free status (Iraq), will I still be taxed the 20% or just pay the 10% penalty?
    Lotta's Avatar
    Lotta Posts: 124, Reputation: 8
    Junior Member

    Dec 23, 2005, 05:41 AM
    It may depend on how large of a amount you remove from the 401k.
    talaniman's Avatar
    talaniman Posts: 54,327, Reputation: 10855

    Dec 23, 2005, 10:34 PM
    Check with your plan administator,as all plans are not alike.mine gives me a one time no penalty withdrawal to buy a house. Yours may be different so always check first.
    fredg's Avatar
    fredg Posts: 4,926, Reputation: 674
    Ultra Member

    Dec 24, 2005, 07:07 AM
    As another said, please call your plan administrator.
    If you withdraw the money while in a tax free status, you may have to eventually pay the 20% Federal Tax if you buy in the US. But, I am not a professional, and you really need to talk with the administrator.
    Best of luck, and I'm sorry to hear that you have to withdraw some money. I am retired, and at 63, still have some left in my 401K; thank goodness!
    CaptainForest's Avatar
    CaptainForest Posts: 3,645, Reputation: 393
    Ultra Member

    Jan 21, 2006, 06:13 PM
    You are recentlly divorced, going to Iraq, yet you are buying a house?

    Doesn't sound like the best course of action. I think you are better off keepig your money in your 401K, and do not buy a house until you return from Iraq.

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