Is there still a penalty assessed when cashing out your 401k if you are using it to pay off student loans?
453126
I'm not a financial advisor, so you should check on this, but I believe that you will pay early withdrawal penalties plus income taxes at your current base rate on whatever you take out for whatever reason before you are 59 1/2.\n\nYou can take a loan against it, but you'll  have to pay that back.  I think you can also divide the entire value by how many years you likely have left to live (from actuarial tables) and take annual "substantially equal payments" without penalty.  All in all, very, very bad idea to use 401(k) money before you are at least 59 1/2.  \n\nCheck the Motley Fool for sound advice on paying off your loans.
726416
You will be taxed for taking money out of your IRA plus penalties for early withdraws.
304477
Just fill out the form for lump sum distribution.  Please be aware you might be penalize for early withdraw and also consider the tax consequences.
820338
Any amount put into a 'qualified retirement plan' as a result of a 'qualified domestic relations order' is not a taxable event.  Any amount not transferred to a 'qualified retirement plan', would be treated as a withdraw from such a plan.  If you are under 59 1/2, there is a 10% early withdraw penalty.  This is above and beyond income tax at regular rates on the amount withdrawn.
47773
For a 401K, unless it's for a true hardship, you will pay a stiff penalty.  Check with your plan administrator but I believe it's around 25%, plus you will have to pay taxes on the amount if if was on a pretax plan and lose the the money's ability to work for you in the inventment.  Unless you have absolutely no other option, it's really best to leave the money alone.  You'll be glad you did later.
691843
You will pay a heavy price for taking money out of your 401(k).  Between the early withdrawal panalty (10%) and the taxes (20-30%), you will lose a LOT in this process.\n\nIf you have debt, you may be eligible for hardship from your creditors.  Call them before they start calling you.  See if you can defer payments for a few months.  Interest will continue to accrue, but they see that you are willing to work with them and may work with you.\n\nTry to get some type of job, even if it's not in your field (delivering pizzas, retail sales, fast food), to pay living expenses (food, shelter, transportation, clothing).  Anything you make above this can go to creditors.  Remember,  your living expenses are more important than your credit score.  Don't starve yourself to keep a good credit score - it's not worth it.
675447
Each company has their own policy.  Some may allow withdrawls starting at age 55 (reduced benefits).  Generally, the only way you'll receive a lump sum is if the company had a policy such that if the net value was below some threshold (depends on the company), they would pay it out as a retirement distribution.  You would then have to put it in an IRA of some sort and cash it out early paying the appropriate penalty.  You'll need to contact the benefits dept of your former company and ask their policy.
12383
There is a 10% early withdrawal penalty, plus the $5,000 is counted as ordinary income in the calendar year you withdraw it so you will have to pay tax on it.
125409
If you are still employed by the plan sponsor your withdrawal options may be limited. Read the plan summary you should have received or talk to your HR person. You might be able to take a loan from your account, but it must be repaid within 5 years.\n\nIf the 401k is from a previous employer, then your options are greater. You can roll the account over into a Traditional IRA. This transaction does not trigger any taxation. \nIf you are over 59.5 years old, you can withdraw money from the account. Any amount withdrawn will be taxable to you as income.\nIf you are not over 59.5 and you withdraw money not only will you pay taxes on the amount you withdraw but you will also pay a penalty of 10% of the withdrawn amount.\n\nIf you do not need the money to cover basic living expenses right now, do yourself a favor and roll the money over into an IRA. Work with a financial planner in your area if you would like help deciding upon an appropriate investment strategy.
1058103
In most cases absolutely NOT. \n\nReason #1\nIt would be very expensive.  Money withdrawn from your 401K is instantly taxable at your highest tax rate.  For most people that's 28% federal plus your state income taxes.   If you are under 59 1/2, you'll pay another 10% penalty.    That's a lot higher than the interest rate on your mortgage.\n\nReason #2 - \nIf you are still with the same employer, you can't just withdraw the money.  You can borrow from some 401K plans, it depends on whether or not your employer allows it, but..... this is a really bad idea too, because in addition to interest, if you leave the employer you MUST pay it back immediately or you suffer the same tax and penalties as above.\n\nReason #3 -\nBecause your mortgage is at a low rate that should be lower than the rate of return on your investments within your 401K.  In other words, the money in your savings is likely to grow a lot faster than the interest you will pay on your mortgage, plus the mortgage interest is tax deductable so it reduces your current income taxes.\n\nReason #4 - \n\nTime is your best friend on investments because the return on it gets to grow exponentially every year.  In other words, if your $260K grew 10% this year and every year, you'd have $286K next year and $314K the year after and so on and so on.  Each year the dollar amount that gets added to your account grows.  (this rough example doesn't include more money you add to the account).   If you took $150K out (and you'd really have to drain nearly the entire account to cover the tax and penalty loss), you'd only have $110K this year left to grow.  So instead of making $26K this year, you'd only make $11K, and each year that deficit would grow larger.\n\nReason 5 - \nYour house is a leverage investment.  Really, since you have a mortgage, even though real estate typically rises in value less than stocks, the rate of return on the actual money invested, is really much bigger than you think.\n\nFor example, let's say you have $20K cash invested (down payment, improvements, and monthly payments) so far and you paid $170K for your house a year ago.  If real estate in your area rises an average of 5% a year, then your house is worth aproximately $178, 500 now.   So..while 5% doesn't sound like a big return, and it wouldn't be had you paid cash for the house, what you have actually realized is an $8,500 gain on the $20K you have already invested.   That's a real return of of 42.3%!  If you take into account what you've saved in income taxes, the return is even better.\n\nSo..anyway you look at it, paying off your mortgage with your 401K would cost you a ton of money.\n\nOh..and worst case scenario. You are suddenly unable to work the rest of your life and all you have is your house and your 401K, should you do it then?  Nope.  Better to withdraw the payment for the mortgage as you need it and leave the rest invested to continue to grow since over time it is likely to outpace your mortgage interest by a large amount AND you leave that money free to meet other needs that may crop up.\n\n:)
409573
It depends on WHAT you are taking the money out for, if you want to buy a home for the first time you are allowed to "borrow" up tp $10,000 without major penalties. There are also allowances for college tuition.  Check with your 401K account advisor, if you pay back the money within a certain period of time, you are not charged major taxes or penalties.
750454
Unfortunately they rushed to distribute the 401K to your friend. They 20% for the federal tax is withholding required because the check was sent to your friend. You friend will have to report the full amount of the 401K on his 2006 tax return. the withholding will be shown on his return just like withholding from a salary. \nYour friend will receive a 1099R in January reporting this distribution in his social security number.This form has a box labeled distribution code. The code should be the number 4 which is a distribution made because of death. This code keeps your Friend from having to pay the 10% early withdrawal penalty. If the code is wrong your friend will need to contact the company to have the code corrected.
917591
In a Roth, you can withdraw any amount you put in tax free...if you take out more (contributions+earnings) then the amount above contributions (earnings) is taxable.  If you are younger than 59 1/2...which you are...then it would also have a 10% penalty.  But! Since you are only taking out contributions...no worries.
562118
Basically, You have to pay the tax plus a 10% penalty\nTopic 424 - 401(k) Plans\n\nA section 401(k) plan is a type of tax-qualified deferred compensation plan in which an employee can elect to have the employer contribute a portion of his or her cash wages to the plan on a pre–tax basis. These deferred wages (commonly referred to as elective deferrals) are not subject to income tax withholding at the time of deferral, and they are not reflected on your Form 1040 (PDF) since they were not included in the taxable wages on your Form W-2 (PDF). However, they are included as wages subject to social security, Medicare, and federal unemployment taxes. \n\nThe amount that an employee may elect to defer to a 401(k) plan is limited. Therefore, your elective contributions may be limited based on the terms of your 401(k) plan. Refer to Publication 525, Taxable and Nontaxable Income, for more information about elective deferrals. Employers should refer to Publication 560, Retirement Plans for Small Business, for information about setting up and maintaining retirement plans for employees, including 401(k) plans. \n\nDistributions from a 401(k) plan may qualify for optional lump–sum distribution treatment or rollover treatment as long as they meet the respective requirements. For more information, refer to Topic 412, Lump–Sum Distributions, Topic 413, Rollovers from Retirement Plans, and Topic 555, 10–Year Tax Option for Lump–Sum Distributions.\n\nMany 401(k) plans allow employees to make a hardship withdrawal because of immediate and heavy financial needs. Generally, hardship distributions from a 401(k) plan are limited to the amount of the employee's elective deferrals only, and do not include any income earned on the deferred amounts. Hardship distributions are not treated as eligible rollover distributions. \n\nDistributions received before age 59 1/2 are subject to an early distribution penalty of 10% additional tax unless an exception applies. For more information about the treatment of retirement plan distributions, refer to Publication 575, Pension and Annuity Income.
100700
yes you still have to pay taxes. Just not on the money you put into the 401k.  Also if i were you id put as much as your employor matches then put the rest in to a roth ira if your younger especially
910908
Generally, yes there are penalties.\n\nHowever, the IRS provides for a safe harbor in that if you pay in through withholding and estimated tax payments the smaller of the following:\n\n1.) 100% of your 2005 taxes (110% if your AGI is above $150K this year), or\n\n2.) 90% of your estimated 2006 taxes;\n\nyou are deemed safe from underpayment penalties, provided the estimates are made timely.  You would then pay anything due at the end of the year.\n\nWhile it may seem that you can just make this payment for the 4th quarter, which is due Jan. 15, 2007, the problem you may have is that you should have been making payments since April 15, 2006, so unless the amounts are very small, I believe that you will be subject to penalties based on what you have described.\n\nI would recommend that you make this 4th Q E/S to minimize the penalties.
714890
Not a good idea at all, the penalty for borrowing against your retirement funds is pretty heavy, they will tax the crap out of you, best to try the Ameridream program or Fannie Mae Foundation. Best of Luck.