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

    Apr 1, 2013, 06:48 PM
    Tax Implications for Early 401k Withdrawal
    I'm 56 years old disabled and receive social security payments the company I worked for has been sold and I need some money bad right now because of my disability I'm not working at all now and I know about the federal tax of 20% but will I be have to pay 10% penalty tax also since I'm disable and over 55 and not working anymore.

    Question title.
    TAX IMPLICATIONS FOR EARLY WITHDRAWAL.
    ScottGem's Avatar
    ScottGem Posts: 64,966, Reputation: 6056
    Computer Expert and Renaissance Man
    		  
    #2

    Apr 1, 2013, 07:12 PM
    First, its not a good idea to put personal info in a public online post. The info was removed for your protection.

    There is not a federal tax of 20%, there is a federal WITHHOLDING of 20%. This is just like the withholding taken from a paycheck. Its taken in advance of your filing your tax return. It may represent more or less than your actual tax due on the withdrawal.

    If you are permanently disabled, there may not be a penalty. If there is, you can rollover the balance into an IRA, then withdraw from the IRA which would be without penalty.
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