Jan 8

Does anyone know a way to bypass the 401k rules and pull out my money. My wife is having a baby, and we could afford for her to be a stay at home mom if I could just pay off my truck so I want to take the money out and give us a easier start. How comments or other ideas?

9 comments so far...

  • generation7 Said on January 8th, 2010 at 7:04 pm:

    early retirement is all i can think of

  • csucdartgirl Said on January 8th, 2010 at 7:52 pm:

    Read the rules for withdrawal. Perhaps you can take a loan against the 401K and pay it back at a decreased rate. Otherwise, you will have to devise another way to figure out finances with the new addition to the family.

  • Tortuga Said on January 8th, 2010 at 8:20 pm:

    I’m not sure what you mean about “bypassing rules”. Your 401K is pretty much set in stone. It’s your money, you can close it out at any time you wish, however, you cannot avoid the Feds, State, and 10% early withdrawal fee (if under 59.5 years old). It’s your money, however, those rules stick to it. Bottom line, you bail now, you get about 55% of the value of your 401K (if fully vested of course).

  • rssllmam Said on January 8th, 2010 at 9:12 pm:

    You can take up to half as a personal loan and pay yourself back over several years.

  • marshfield_meme Said on January 8th, 2010 at 9:39 pm:

    The penalties are pretty steep; so, you are better off getting a loan than pulling your money out of your 401k. Talk to your an enrolled agent who does tax preparation for the best advice. Most CPA’s do not have this status. Check your phone book and call around.

  • Duchess of Lincara Said on January 8th, 2010 at 10:09 pm:

    I have heard you can file a hardship? Then the fines aren’t as steep. Not sure but that is what we are looking into doing this week. Congrats on the baby! Hope it all works out for you.

  • Common Sense Said on January 8th, 2010 at 10:35 pm:

    In 10 to 20 years, should you do this…. you’ll tell everyone it was the biggest financial mistake you ever made.

    Been there… done that…. biggest financial mistake I ever made.

  • theropingeffect Said on January 8th, 2010 at 11:05 pm:

    Pay the early withdrawl fee and start investing in gold and silver.

  • digdowndeepnseattle Said on January 8th, 2010 at 11:57 pm:

    can’t bypass the rules…closest thing you can do is take a loan and then tell payroll you want to stop the payments. this will cause the loan to go into default. HOWEVER, this will be a HORRIBLE mistake to make as you’ll be taxed on the loan AND incur a 10% penalty come tax time; all without any withholding being taken so your tax bill will be rather large at a very bad time. A new baby in the house means a number of extra expenses that you never factored in…last thing you need is a big tax bill on top of those.

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