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    NRoberts's Avatar
    NRoberts Posts: 1, Reputation: 1
    New Member
     
    #1

    Apr 24, 2005, 07:57 AM
    Cashing out 401K
    I am 49 yrs old with a 401k sitting in a previous employers plan
    (about $70k) and thinking about cashing out to eliminate the debt that I have ($30K from consolidation).
    I don't see any other way to get out from under it. I know the consequences of doing it; penalty, taxes, lost future income. Any ideas?
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,818, Reputation: 846
    Senior Tax Expert
     
    #2

    May 2, 2005, 07:16 AM
    NRoberts:

    Just to make sure you understand: The tax load could be as high as 50%, and will be at least 35%.

    Have you considered bankruptcy? The law just changed making it harder. But it has not gone into effect yet.

    Contact the local office of the Consumer Credit Counseling Service (you can find the local office by accessing their website at www.nfcc.org). They will help you explore all your options before you cash in your retirement savings.

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