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    Robert Arranz's Avatar
    Robert Arranz Posts: 1, Reputation: 1
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    #1

    Mar 27, 2008, 05:18 PM
    401k early withdraw
    Hello does anyone know what the penelty would be on $3,100 taking out of a 401k early?
    What would be the % taken out?

    Thank you,
    Robert
    fhoss3634's Avatar
    fhoss3634 Posts: 17, Reputation: 1
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    #2

    Apr 6, 2008, 04:47 PM
    Normally when you take an early distribution your employer will withhold 20% for federal withholding. A 10% penalty may apply. See IRS.gov publication 575
    ebaines's Avatar
    ebaines Posts: 12,131, Reputation: 1307
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    #3

    Apr 7, 2008, 07:47 AM
    You can expect the plan admin to withhold 20%, so the check you get will be for $2480. When you do your 2008 taxes you will determine the actual amount of income tax owed based on your income tax bracket, and you will also have to pay the 10% penalty ($310). And if your state has an income tax you will have to report the $3100 to them as well. So don't plan on spending more than about $2K of the withdrawal, or you could be short of cash next April.

    Have you looked into other options rather than taking an early withdrawal, such as taking a loan against your 401(k)?
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