How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask RD Your Own Question
RD
RD , Certified Public Accountant (CPA)
Category: Finance
Satisfied Customers: 8784
Experience:  MBA, CPA
510454
Type Your Finance Question Here...
RD is online now
A new question is answered every 9 seconds

Im 31, if needed can i draw out from my 401ks and what penalty

Resolved Question:

I'm 31, if needed can i draw out from my 401k's and what penalty would i get hit with?
Submitted: 4 years ago.
Category: Finance
Expert:  RD replied 4 years ago.

RD :

Early withdrawal from 401K are subject to penalty at 10% of the distribution amount. In addition you owe tax on the amount taken out as distribution.

RD :

Tax on the distribution will depend on your overall tax bracket.

Customer:

ok

Customer:

well im my case

Customer:

my GF and i owe about 25k in debety

Customer:

i have 15k in 401k

Customer:

and 20k in savings

Customer:

wanting to pay it all off.

Customer:

any advice?

Customer:

as a note, im 31, shes 26 - So we would be starting over i guess, but debt free -

RD :

It may be advisable to use your savings to payoff the debt and take a loan, if that is a possibility, from your 401K to payoff the debt.

RD :

Some 401K plans allow participants to take loan

Customer:

aya

Customer:

ok

Customer:

as in, tax free?

RD :

Yes, that is correct

Customer:

understood.

Customer:

ok, ty.

RD :

Thanks for using Justanswer.

RD and other Finance Specialists are ready to help you