Finance Questions? Ask a Financial Expert for Answers ASAP
Welcome and thanks for your question!
If you are referring to the 10% penalty for early withdrawals from a 401(k) plan, that only applies to those under age 59 1/2.
Because you exceed that age at 63, you will not have to pay a penalty tax, but will be required to pay income tax on any 401(k) withdrawals (assuming you made contributions pre-tax). 401(k) distributions are taxed at your regular income tax rate.
Please let me know if you have any questions on any of the above information.
due to the housing market and things are getting better in that area. Is my plan a good one. I think I can save if the debt is paid off?
I currently make 60,000 year and my house payment is 928.00 month. and my taxes 8,000 year.
are you there?
Your plan might be a good one - but it would depend on the size of your 401k withdrawal and how much debt and the associated interest rates/payments.
The biggest disadvantage to the withdrawal is that you lose the ability for those funds in the 401k to continue to earn and compound interest.
That may be less of a concern, if, as you say, you are going to contribute larger amounts to your 401k plan going forward.
Yes I plan on putting into the 401K more to what is comfortable. One whole paycheck goes to the credit cards I've had it. But since I cannot retire for a few more years? How to best calculate best plan. Ihave almost 100,000 in 401K
If your whole paycheck is going to the credit cards, it probably would be most beneficial to pay off the debt. I can't crunch the numbers, as that would require detailed information about debt balances, interest rates, etc. and really is more than I feel comfortable discussing in an online forum.
I would caution you to only take out what's necessary and to also consider taking out maybe part in 2013 and part in early 2014 to lessen the tax hit at one time.