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    3880's Avatar
    3880 Posts: 1, Reputation: 1
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    #1

    Oct 31, 2007, 08:15 AM
    401k penalty
    I am 36 years old and have $24,000 in a traditional IRA that I rolled over from a 401k account. I need to pay down some debt and am wondering what kind of costs including penalties I will have if I use all the money to pay debts. The purpose of all this is to get away from several monthly payments that I can't afford anymore and save my credit. I have other retirement accounts I share jointly with my wife and will be able to put more into a Roth IRA after my debts are paid.

    Thanks
    ScottGem's Avatar
    ScottGem Posts: 64,966, Reputation: 6056
    Computer Expert and Renaissance Man
    		  
    #2

    Oct 31, 2007, 08:36 AM
    You will pay a 10% penalty plus the money will be added to your taxable income for the year.

    This article may help:

    Eight Ways to Avoid the 10% Early Withdrawal Fee on Your IRA
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