Early Withdrawal

Question: Is it a bad idea to make an Early Withdrawal of an IRA?

I have a small amount of money in an IRA from a past employer (2800) and would like to withdraw it to deal with some current debt. I have a healthy 401K at my current employer – but what penalties will I face by withdrawing this?

Answer: The money you take out will be taxable and considered income.
Be careful in how much you take out, it could bump you into a bigger tax bracket.
I know it’s hard to calculate, but keep it in the back of your mind.

I hate to see anyone removing money from an IRA.
Did you know that if you can prove hardship, you could make a loan from your current 401K?
Call your HR person and make an appointment – you will have to show prof of hardship (such as credit card debt).

Where is that IRA money? Did you leave it at your last employer?
That is not a good idea.
Sometime in the future I want you to roll that over to a brokerage account.
Only leave it at old employer if you know that it will NEVER go out of business.

Oh I forgot, 10% penalty + your current tax rate.
Keep up to 40% aside for next tax time in April – you’ll have to write a big fat check for taxes and penalties.
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Alex Jones & WeAreChange Ireland – IRA – EU Treaty (part 1)