Early | Early Withdrawal

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Early Withdrawal Roth 401k

May 30th, 2005

Question: Better to withdraw funds from a 401K or IRA?

Assuming you can withdraw early from an IRA account.

Right now I have a 401K and I might need to take an emergency withdrawal in the next couple of months. I know there is a penalty. Would it be better to roll over to a roth ira right now and withdraw in a couple of months? What kind of penalties am I looking at?

Answer: Neither is good to withdraw from. You are looking at about 40% in fees and penalties. And if you loose your job (where the 401k) is at and you haven’t paid back the loan, the government will assume you did an emergency withdraw.

I urge you to try and scrimp and save for what ever your emergency is (or ask for a payment plan with what you need to do).

Will Your 401k Be The Next Victim of Failed Government?