So is there no way for me to get my 401k money out without a penalty?

[datznasty]

It's not tons of money, it's like 5 stacks I have in there from my last job I was saving a %, but I got a new job that doesn't have 401k and so Iwant all the money back, plus it's my money anyways and I'd rather just have it in a savings. The literature Ascensus sent me says they will take a 20%fee and then I'll get taxed another 20% at the end of the yr.

I can't just "roll it over" into any type of account that I can access? Who wants to wait 37 more years to collect 5 stacks?

 

[fro b giant]

I don't believe you can take the money without penalty. That money was deducted from your check tax free and placed into your 401k account, uncle Sam willmake sure you pay taxes on it if you touch it before retirement.

 

[sundoobie]

If you take it out you will get a form 1099-R which will state early distribution with no known exceptions. You are to report this on your tax return and behit with the 10% Fed penalty plus State penalty (don't know what State you live in). Plus on top of the penalty you have to pay taxes on the distributionbased on your tax rate.

You can roll it over to an IRA and not be taxed. Personally I would roll it to a ROTH IRA, pay the taxes on it now while you're in a lower tax rate andhave it grow tax free till you hit retirement age.


Edit.. let post the exceptions

Exceptions for Early Distributions from a Qualified Retirement Plan such as a 401(k) or 403(b) plan:

• Distributions upon the death or disability of the plan participant.
• You were age 55 or over and you retired or left your job.
• You received the distribution as part of "substantially equal payments" over your lifetime.
• You paid for medical expenses exceeding 7.5% of your adjusted gross income.**
• The distributions were required by a divorce decree or separation agreement ("qualified domestic relations court order"),

 

[crcballer55]

It would be ridiculous to take it out now. You may only have 5K now, but by the time you retire, that will most likely be about 20-30K. If you were to takeit out without penalty (theoretically) and put it into a savings account, you would only have about 7-10K depending on the interest rate fluctuations. You're still young enough where you won't have to worry about the money. If you really are worried, split it between a target date fund and a bluechip fund since those will be the most conservative running up to your retirement date. Whether you like it or not, you're going to have to retire one dayso you might as well be prepared unlike most of the baby boomers now.

 

[dagreatj]

You can take a loan out on half of it and just pay it back through payroll deductions.... the only logical option bro

 

[airon0828]

the loan only works usually if you are still employed. best bet is to rollover to a ira and take it out that way. for my old company if your 401 was under 5kthey paid you out regardless, so you have to talk to your hr department about that