Comments on: Can I Take Out My 401k Money Without Any Fees?

By: Karen M

Karen M — Mon, 08 Feb 2010 08:09:19 +0000

When the money was deposited, no taxes were withheld against those earnings. When you withdraw the money, they will withhold the taxes and assess a penalty. I want to say it’s about 30-30% overall.
If it’s a hardship situation or you’re using the money to pay tuition or something, you may be able to withdraw without penalty.
You may not be vested in the entire $400. Did you contribute all of that money, or is some of it the company’s match? Were you with the company long enough to keep matched funds based on their vesting schedule?
You should call the plan administrator. They will tell you how to do it, and what penalties and taxes will be withheld. They can also tell you if there are exceptions that apply in your situation.
This withdrawal will also complicate your taxes a bit—no more 1040EZ for you!

By: kate

kate — Mon, 08 Feb 2010 03:04:56 +0000

Because withdrawls are not normally allowed until retirement you have to fill out special forms.
The $$ dispensed will be taxable the year withdrawn plus the government will penalize you and extra 10%.
Depending on what kind of investment it is in, there may be a sales fee to convert it to cash.
They have the real answers tho, why ask us instead of them ?

By: Jeff S

Jeff S — Sun, 07 Feb 2010 23:45:53 +0000

Yes, you can withdraw the money from the account – but there will be a penalty. Call the company who manages your 401K and they should be able to instruct you on how to withdraw it.

By: John R

John R — Sun, 07 Feb 2010 21:54:25 +0000

You should be able to roll this out tax free into an IRA. At that point, since you are a college student, you should be able to withdraw the money. SInce you have college expenses, you should be able to take it out without the 10% penalty up to the total of your education related expense, although you will still have to pay the taxes at your normal rate.

By: Thin Kaboudit

Thin Kaboudit — Sun, 07 Feb 2010 16:11:41 +0000

Dean is right….When you are older & better at math, you may come to realize that the $200 you got when you cashed out (after taxes and penalties) would have grown into enough money to buy a nice boat, if only you’d left it alone!
Ah, the miracle of compound interest!

By: lcritter

lcritter — Sun, 07 Feb 2010 13:57:01 +0000

I believe you can only withdraw if you have a hardship. If you do they can charge quite a bit, up near 30% or more! You should be getting quarterly statements and there should be a phone number or website on them.

By: digdownd

digdownd — Sun, 07 Feb 2010 13:13:01 +0000

short term thinking….that 400 bucks will be 50,000 when you retire. But you’re determined so you may as well be informed!
They will withhold 20% of it for taxes so you’ll get $320. When you file your taxes you will be taxed on it according to your regular tax rate. Depending on your income that could be ZERO in which case you could get that $80 back. BUT…after your taxes are calculated you will need to add another $40 to that figure (10% early withdrawal tax and yes this applies to you even if you have college expenses. It’s not a hardship withdrawal). Numbers are small enough that it normally wouldn’t be a big deal…but if you’re willing to sacrifice $50k of retirement for a bucks now you must be hurting enough that the taxes may be an issue.
The place where your 401k is held may or may not charge you a fee. If they do, it should be no more than $100.00.
good luck

By: Anonymous

Anonymous — Sun, 07 Feb 2010 10:52:26 +0000

I dont think if you do that there wont be a penalty, but to make sure just make inquires at the bank or ask your human resource at work you will be informed.

By: curiousn

curiousn — Sun, 07 Feb 2010 06:16:16 +0000

Since you are no longer working for this company you should have been sent a form asking what you wanted to do with the money. Most company’s will offer to keep it in the present account, roll it over to a CD or ask if you want to cash it out. They will most likely charge you a fee and the Federal government will penalize you for taking it out early. Contact you 401 k administrator for more information on your particular account

By: CaSeY LyNe

CaSeY LyNe — Sun, 07 Feb 2010 00:07:20 +0000

I had one that had like $800 in it and closed it you may have to pay taxes that all I really know of but Im not sure if thats how it is everywhere I have it w/merrill lynch and I didnt have to pay much sooo… just call the company who had you 401k or your old work place and they will be able to help you Good luck!