ANSWERS: 3
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You can withdraw money early from deferred-tax retirement accounts like 401K and IRA, but its expensive: first, you'll be paying taxes at your marginal rate on the whole sum you withdraw as regular income, then you'll pay an additional 10% early withdrawal tax.
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I think it is referred to a "Hardship" when you need to withdrawal from your 401k early. Taxes will be heavy.
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Check with the advisors at the company managing your 401K. Withdrawing will carry a hefty tax penalty, but a lot of companies allow you to take out loans interest free from them. You will have to pay it back, but you are paying yourself. Also, they may call it interest free, but it really isn't since whatever amount you "borrow" will not earn interest till it is replaced. Check with your HR department at your company. I've known a few folks that did this to come up with downpayments on their homes.
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