My husband thinks he may lose his job, we have two 401Ks with this company, one is from a previous company that was purchased by the company he now works for. He is unable to do anything with that 401K, except when he leaves the company, it has roughly $17000 in it, and the other has roughly $14000.
He is 41 years and I am 40 years both accounts are in his name, he currently makes $94000 per year.

Question: What kind of penalties are we looking at? Does the government and the present employer place penalties, or is it just state and federal. And what are they?

I look forward to hearing from you, thanks in advance for your help.

TX

Ps we live in Massachusetts, if that makes any difference on the taxes... seems to always have some kind of crazy exceptions if you live in this God forsaken state.

You will be subject to income taxes for both federal and Massachusetts at the marginal tax rate (about 25% for the federal return), PLUS a 10% Earl Withdawal Penalty.

Do NOT do it unless you absolutely have to. At your tax rates, you will pay about 45 cents on every dollar withdrawn in taxes.

Why do you think you are looking at ANY penalities. Some companies allow you to leave your 401K in their plan. If not, you can roll them over into an IRA.

I just made the assumption that if we took it out there would be penalties, but had no idea that they could be almost 50%.

Yes, they could so either leave them or roll them over.

Thanks again, we will check into this with our company. I would much rather leave it alone. Kemah

Glad to help! Next time, believe your spouse! :-)

NOW you have gone TOO FAR... (just joking) Listen to my spouse, that will never happen.

WHY does that sound familiar?

It's the unwritten law to defy your spouse... lol

Lmao!