[kharrison49]

I have worked for the same bank for 15 years as a mortgage originator. Three years ago I elected to go on straight commissions (no base). My anticipation was to earn much more money than my than $30,000 annual salary. My focus was to be on new construction (very bad timing). I have been borrowing from credit cards and my 401-k program for over 2 years. The market has continually fallen and my commissions have been close to non-existent. My pay checks have been barely enough to cover my $700 monthly (payroll deducted) 401-1 payments on the amounts I have borrowed. I am 58 years old and on the verge of bankruptcy.

I have a substantial amount in my 401-k that I would like to withdraw to help me through my present dilemma. Does anyone know how this money can be withdrawn without penalty. My company has contributed nothing to this account. I have made no (tax free) contributions to this account for several years. My earnings are due to by choice of investments. I can understand having to pay tax on the liquidated amount but I feel that there must be some way to avoid paying a penalty to the IRS just because my account is labeled 401-K.

Any advise would be greatly appreciated.

Ken Harrison

[AtlantaTaxExpert]

Ken:

Sorry, but unless you retire from your job, any withdrawal will be taxed at your current tax rate PLUS the 10% Early Withdrawal Penalty.

There ARE exceptions to the 10% Early Withdrawal Penalty, but it involves paying higher education costs, medical bills, disability, etc. Bad luck on earning potential does not qualify.

[ScottGem]

As ATE points out, the hardship provisions of 401K plans are very stringent. The only way I see you qualifying is if you are facing foreclosure on your home. Anyway you can go back to salary plus commission?

[howard13]

Age 60 tax penalty 25k withdraw

[howard13]

What are the exception to 401k age 60 25k to avoid 10 % penalty

[howard13]

What are the exception to 401k age 60 25k to avoid 10 % penalty

What do you mean salary plus commission