How do you get your money out of a 401 K. I know you can go the hardship route and the loan route. One reason you can check off in hardship is if you fear your house will be foreclosed on. If you have plenty of money to make your monthly payment but fear that the government will go bust and money will not be available to pay your mortgage payment, will that qualify to let you have a hardship. If you check off hardship and get the money and the fed doesnt think it is a hardship, what help (penalties) will the government give you to help see the error of your ways. After all, the government is here to help you and knows what's best.
ECON How do you get your money out of a 401 K.
- Thread starter JeanCat
- Start date
Jeff Allen
Producer
As fast as you can.
Good luck.
Make sure you hold forty percent for the thieves, er IRS.
And make the rest shiney...don't waste it paying of your house, IMO...likely if we have hyperinflation the fools will nationalize houseing...be dumb to own it. We are just making our payments like good sheep.
J
Good luck.
Make sure you hold forty percent for the thieves, er IRS.
And make the rest shiney...don't waste it paying of your house, IMO...likely if we have hyperinflation the fools will nationalize houseing...be dumb to own it. We are just making our payments like good sheep.
J
amazon
Veteran Member
We had to do a loan. We were told if we took it out they would keep 30 or 40% for taxes. Then of course, you must claim it on your tax return and it is penalized 10%. You'll probably end up w/ half the total if it's fully vested. Good luck. We moved ours into basically a savings account. It is not in the market at all. And they wouldn't let us put it in PM's either.
Seeker
3 Bombs for Hawkins
Can't you roll it over into an IRA? There are penalties for early withrawals from IRAs, if that is your next planned step, but you're going to have to pay taxes as well anyhow. Do it soon - the Bush tax cuts expire the end of this year. Beginnning January 1, 2011, your tax bracket is going to rise dramatically.
msswv123
Veteran Member
How old are you? IIRC you can take it penalty free if you are over 59 1/2...a hardship can also be taken for college tuition or alot of medical bills..those penalties do suck~..good luck..blessings T
Moggy
Inactive
That would not be a good move as the US Departments of Labor And Treasury have scheduled a hearing on Sept. 14-15th, wherein the US government plans to eventually nationalize (confiscate) all assets in private Individual Retirement Accounts (IRAs) and 401K plans.
lectrickitty
Great Great Grandma!
IF they haven't changed the rules, there is a way to move it from a 401 to a Keogh. IIRC it takes a few steps to get it done. You'll still have to pay the taxes, but not the penalties. That might be a bonus to pay the tax now, before the rates skyrocket and take much more of your money. Once you have it into a Keogh, you can invest it any way you want, such as pm's, real estate, or whatever.
You need to check with a financial adviser to find out how to make the transfer, IF you still can. I wish I remembered the details on what steps to take, but it's been several years and my memory isn't what it used to be.
You need to check with a financial adviser to find out how to make the transfer, IF you still can. I wish I remembered the details on what steps to take, but it's been several years and my memory isn't what it used to be.
dimensiondancer
Inactive
Where did this info come from? Link?
Seeker
3 Bombs for Hawkins
"eventually" could possibly happen, but its not going to take place on Sept. 14th or 15th.
Roll over your 401(k) into an IRA at a local credit union. You will not pay any tax as long as you directly roll it over and do not touch the money yourself. Your credit union officer can explain all this. You can then take the money from your IRA, either in monthly payments or a larger amount if you don't mind being taxed on it. Again, do this before the end of 2010. If you don't mind giving IRS at least 40% of your entire 401(k), go ahead and cash it out. And then what?
Join a credit union and ask them for their advice. Ask whoever set up your 401(k) for you. They are the professionals and should have better information for you.
Roll over your 401(k) into an IRA at a local credit union. You will not pay any tax as long as you directly roll it over and do not touch the money yourself. Your credit union officer can explain all this. You can then take the money from your IRA, either in monthly payments or a larger amount if you don't mind being taxed on it. Again, do this before the end of 2010. If you don't mind giving IRS at least 40% of your entire 401(k), go ahead and cash it out. And then what?
Join a credit union and ask them for their advice. Ask whoever set up your 401(k) for you. They are the professionals and should have better information for you.
Walrus Whisperer
Hope in chains...
Are you still working for the company that you have the 401K with?
If yes, you have to check THEIR rules and/or the 401K company rules that have physical possession of the money. Basically, most will not let you have any part of it unless you can prove hardship or take a loan out against it and you WILL pay a good interest on the loan-good for the company holding the money, that is. My company had only a few things that they considered a "hardship"-
IF you are 56 AND are separated from the company you have the 401K with, You may take it ALL out with NO PENALTY. You still have to pay your tax bracket taxes on it, though.
IF you are still working for the company you are pretty much screwed.
If yes, you have to check THEIR rules and/or the 401K company rules that have physical possession of the money. Basically, most will not let you have any part of it unless you can prove hardship or take a loan out against it and you WILL pay a good interest on the loan-good for the company holding the money, that is. My company had only a few things that they considered a "hardship"-
IF you are 56 AND are separated from the company you have the 401K with, You may take it ALL out with NO PENALTY. You still have to pay your tax bracket taxes on it, though.
IF you are still working for the company you are pretty much screwed.
kozanne
Inactive
I had to do the same thing when I left my former employer, roll it over to an IRA, but the kicker is that IRA's are not FDIC insured. But then, there are some on this board who say the FDIC is insolvent.
Oh hell, just take the damn money and hide it under your mattress??????????
Thunderbird
Veteran Member
Wife is going to be 62 this month. Sept 10 is her last day for many of the above reasons.
imaginative
keep your eye on the ball
Make sure you dot your 'I's and cross your 'T's here.
A good website to start at is http://www.401khelpcenter.com/hardships.html
They say that-
The following items are considered by the IRS as acceptable reasons for a hardship withdrawal:
1. Un-reimbursed medical expenses for you, your spouse, or dependents.
2. Purchase of an employee's principal residence.
3. Payment of college tuition and related educational costs such as room and board for the next 12 months for you, your spouse, dependents, or children who are no longer dependents.
4. Payments necessary to prevent eviction of you from your home, or foreclosure on the mortgage of your principal residence.
5. For funeral expenses.
6. Certain expenses for the repair of damage to the employee's principal residence.
Hardship withdrawals are subject to income tax and, if you are not at least 59½ years of age, the 10% withdrawal penalty. You do not have to pay the withdrawal amount back.
Congrats
A good website to start at is http://www.401khelpcenter.com/hardships.html
They say that-
The following items are considered by the IRS as acceptable reasons for a hardship withdrawal:
1. Un-reimbursed medical expenses for you, your spouse, or dependents.
2. Purchase of an employee's principal residence.
3. Payment of college tuition and related educational costs such as room and board for the next 12 months for you, your spouse, dependents, or children who are no longer dependents.
4. Payments necessary to prevent eviction of you from your home, or foreclosure on the mortgage of your principal residence.
5. For funeral expenses.
6. Certain expenses for the repair of damage to the employee's principal residence.
Hardship withdrawals are subject to income tax and, if you are not at least 59½ years of age, the 10% withdrawal penalty. You do not have to pay the withdrawal amount back.
Congrats
silent watcher
Senior Member
It is intentionally made hard to get money out because this is supposed to be your retirement money. If you are still employed at the company you are bound by their rules so you will have to check with the plan administrator. Hardship must be proven to the administrator and being afraid that the government might take it or that the market might crash is not a hardship. If you are under 59 1/2 there will be a penalty when you file your taxes. The administrator will also hold back 20% for Fed tax, some companies will also hold State Income tax if you State has them. I think on a hardship there is also a max of 50% of you vested balance up to a maximum of $50,000 so if you have more that $100,000 you won't be able to get it all. You will also be prevented from contributing any funds to your account for 1 year.
Some plans do allow an "Inservice rollout" if you are over their normal retirement age but still working (our plan does and we have several people who have done it). Your plan may allow loans in which case you will have to pay interest (usually 1% above prime) back but you are paying it to your own account not to the company administering the plan.
If you quit you can get your money out (but are subject to the penalties and taxes) or you can rollover the funds into an IRA. There are self directed IRA's that allow you to invest in gold, silver and/or real estate.
Some plans do allow an "Inservice rollout" if you are over their normal retirement age but still working (our plan does and we have several people who have done it). Your plan may allow loans in which case you will have to pay interest (usually 1% above prime) back but you are paying it to your own account not to the company administering the plan.
If you quit you can get your money out (but are subject to the penalties and taxes) or you can rollover the funds into an IRA. There are self directed IRA's that allow you to invest in gold, silver and/or real estate.
Great Northwet
Veteran Member
Here's one link dd:
I've read about this for about a year now. The pool of 401(k)'s is about 12-15 trillion dollars that the .gov has been looking for a way to tap into for years. My country is bankrupt; so the congress is looking for a way to continue the charade as long as possible, using our retirement savings!
http://www.dcemploymentlawupdate.co...ing-employee-investment-and-retirement-plans/
amazon
Veteran Member
I read over on another forum it's down to 6-7 trillion.
Our 401K nazi wouldn't even let us take out $$ for purchase of our 1st home. We had to do a loan. We stopped addidng to it a couple years ago. If we ever see it I'll be surprised.
BTW, I read they are looking to have the companies that hold all the 401K and IRA $$ buy Tbills.
Moggy
Inactive
From Midas...unable to offer a link because it has been removed from the net.
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dimensiondancer
Inactive
Someone help me out here. This money that we take from our pay and put into our OUR O U R 401(k), is our money WE have EARNED. Correct?
So what if it isn't taxed yet, what right does the government think they have over our EARNED money out of OUR paycheck? I could see they tax it, then hand the money over to a post taxed account in our name, but to take our hard earned money we set aside to retire one, well screw them!
And, if I put $1,000.00 a month into my 401(k) a month for the past 10 years (which I haven't, but what if) and my bozo workmate only puts $20.00 a month in, would the government even out our retirement income to give bozo and myself equal monthly installments upon retirement?
If this is the case, we are now in Nazi Germany. Heil Obama.
This is considered major suckage and although I turn 59 1/2 in March 2011, I will take every penny out and let them tax at will. I am pissed I have to wait until after 1-1-2011, but I am not going with the penalty.
When everyone gets wind of what is happening, the stock market WILL crash, due to everyone with any substance in their 401(k) will pull out.
So what if it isn't taxed yet, what right does the government think they have over our EARNED money out of OUR paycheck? I could see they tax it, then hand the money over to a post taxed account in our name, but to take our hard earned money we set aside to retire one, well screw them!
And, if I put $1,000.00 a month into my 401(k) a month for the past 10 years (which I haven't, but what if) and my bozo workmate only puts $20.00 a month in, would the government even out our retirement income to give bozo and myself equal monthly installments upon retirement?
If this is the case, we are now in Nazi Germany. Heil Obama.
This is considered major suckage and although I turn 59 1/2 in March 2011, I will take every penny out and let them tax at will. I am pissed I have to wait until after 1-1-2011, but I am not going with the penalty.
When everyone gets wind of what is happening, the stock market WILL crash, due to everyone with any substance in their 401(k) will pull out.
WildDaisy
God has a plan, Trust it!
I don't think they consider "fear" of foreclosing as a hardship. You have to already be in proceedings with documentation to get it.
Loans, you can only take 50% of your balance. You can take 100% of any after-tax accounts. If you are 59 1/2 or older, you can begin taking dispursements without penalty.
I used to do after tax accounts for this purpose. I paid taxes ahead of time and only needed to pay tax on any earnings. Basically, that account ended up being a 'Christmas club" of sorts, earning higher interest then at the bank, and then once a year I would withdrawal the money for vacations or holidays.
The before tax account I stopped a long while ago and do not contribute any longer. I've taken loans against it from time to time, but it is such a small amount that I don't consider it to be my "retirement" fund. It wont be there when I retire (if I ever can).
Loans, you can only take 50% of your balance. You can take 100% of any after-tax accounts. If you are 59 1/2 or older, you can begin taking dispursements without penalty.
I used to do after tax accounts for this purpose. I paid taxes ahead of time and only needed to pay tax on any earnings. Basically, that account ended up being a 'Christmas club" of sorts, earning higher interest then at the bank, and then once a year I would withdrawal the money for vacations or holidays.
The before tax account I stopped a long while ago and do not contribute any longer. I've taken loans against it from time to time, but it is such a small amount that I don't consider it to be my "retirement" fund. It wont be there when I retire (if I ever can).