Early Withdrawal

Question: 401K early withdrawal (no hardship)?

I may want to take an early 401K withdrawal. I am very much in debt and am not worried about any penalties. I just need the money and it would only be about $5000 (after penalties). I need to know if I do decide, should I be allowed to withdraw all the money even though I don’t qualify for the hardship requirements?
Thanks for the input. Any suggestions as to what the better options are at this point?

Answer: If you have to, draw out as little as possible from your 401K. You can also draw it out as a loan, which means you pay yourself back typically at 10% interst to yourself, with automatic withdrawl from your paycheck over a 5 year period. This minimizes penalty.

If at all possible, try to get a consolidation loan rather than draw from your 401K. Most of all realize that you need to figure out how to live within your means if you want your debt to not recurr. Start by making a detailed budget with some allowed for savings and then stick to it. Otherwise the habits that got you in debt are likely to land you back there again.

401K Hardship Withdrawals A Disturbing Trend

Question: how can i use part of my 401k to invest in a picticular stock with paying tax on that withdraw?

I want to buy a certain stock woth some of my 401k.It will still be my retirement investment but from what I understand if I withdraw it & purchase goodsor services (stock) I will have to pay tax on it unless I go through a investment firm’s 401k savings plan.Why cant I just invest it myself in that picticular stock? I hope i’ve not rambled on too much & cloudied the sky.Thanks—-Recently I just pulled out of the stock market with my finacial group & put some in bank IRAs& & some with a fixed annunity I would like to put some in a stock that I think is doing well–how can I do that w/o paying a early withdrawal tax on it? Whew!!!

Answer: you cant. You can only invest with who what products your 401k provider has. To do this you have to roll it over to a self-directed IRA

Early Withdrawal from Retirement Accounts

Question: 401K early withdrawal penalty?

Okay, I need an answer from someone who KNOWS FOR SURE about this rule. I already withdrew my 401k when I left my employer this year. I am filing taxes, well my accountant is. The plan holder took out 20% for Fed tax. Some people say this may be enough to cover the penalty , or may not be enough. What does this may/may not stuff mean? Dont they take out 20%, then tax you another 10% of the original principal amount? Example: I have 10,000 in 401k , get 2,000 withheld from fed tax upfront, then get another 1,000 (10% of 10,000) in April for a total of 30% of the original amount? Or am I misunderstand this rule?

Answer: You will owe income tax at your highest marginal rate plus 10% of the withdrawal.

When Can I Make Withdrawals From My 401k?