I was let go by a company 3years ago I have a 401k plan there. I am wondering if I can withdraw these funds at this time.

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Originally Posted by tomo

i was let go by a company 3years ago i have a 401k plan there. I am wondering if i can withdraw these funds at this time.

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Yes, but ask them to make sure, you will have to pay taxes on the entire distribution since you were granted a deduction for the contributions, if tax deferred in then it will be taxed coming out, unless you are at least 59 1/2 yrs old. Check into taking out a loan, no taxes then, just interest on what you borrow. Plan must permit loans, some do not.

You can always withdraw but there is a penalty on top of tax you pay if you are under certain age (59 1/2?). So, taking out a loan against your 401k may be better. The interest you pay goes into your 401k account so it is like an interest free loan.

Since you are no longer working there a loan is generally not a possibil;ity since the loan payments usually have to be from payroll deductions.

As noted, you can withdraw the money, but if you aren't of retirement age, you will pay a penalty. In addition the withdrawal is taxed as regular income.