Hello,

I will be moving abroad within the next year. I currently own a house which I will be selling. Before I can sell this house, I need to make some much needed repairs, i.e. a new roof and fix a sagging bathroom floor. I want to cash out of my 401k plan to get the money to make the repairs to my home. I have a loan of about $2000 and my vested balance is around $5000. OR... Instead of cashing out my plan, can I take an early retirement? I am 51 years old at present. I will be employed, however, when I go overseas, so what are my options? I do not want to rollover the money and I do not want to take another loan because I am not certain that I can repay it. Even though I will be employed, I must first attend school and then secure a job, so employment is not yet guaranteed. When I sell my home, I plan to pay off all existing debt so when I move I will not have any debt to deal with.

Thanks for your help.

If you take a withdrawal from your 401(k) plan your outstanding loan will immediately become due, and assuming you don't repay it, that means you will have to pay ordinary income taxes plus the 10% early withdrawal penalty on the amount of the outstanding loan plus whatever whatever additional you withdraw. Not sure what your early retirement question has to do with anything - a withdrawal is a withdrawal, and since you are under 59-1/2 a withdrawal means having to pay the 10% penalty on top of ordinary income taxes - doesn't matter whether you are employed or not.

Ok, thanks.