http://www.a401kwithdrawalrules.com 401k Withdrawal Rules 101 Sat, 04 Sep 2010 17:00:56 +0000 http://wordpress.org/?v=2.7.1 hourly 1 http://www.a401kwithdrawalrules.com/what-are-the-conditions-for-401k-hardship-withdrawal-rules/comment-page-1/#comment-11 Scott Thu, 27 May 2010 02:42:14 +0000 http://www.a401kwithdrawalrules.com/?p=24#comment-11 That's how a 401-k works. You presumably knew going in that it's a _retirement_ account. The 10% penalty is there to discourage you from raiding it before you retire. In your case, if those medical expenses eat a big enough part of your annual income, you can get the penalty waived. You'll still pay income tax on the withdrawal, because the money went into the account before it was taxed. The big, bad government is NOT using your 401-k money (it's a private account, so your brokerage may be using some of it), nor is it telling you what you can or can't do with your money. However, the government is discouraging you from spending your retirement nest-egg before you retire. You opened a private account with certain well-known rules that allow you to put aside retirement money pre-tax. It's a contract. You want out of the contract, you pay the penalty. That is all. That’s how a 401-k works. You presumably knew going in that it’s a _retirement_ account. The 10% penalty is there to discourage you from raiding it before you retire. In your case, if those medical expenses eat a big enough part of your annual income, you can get the penalty waived. You’ll still pay income tax on the withdrawal, because the money went into the account before it was taxed. The big, bad government is NOT using your 401-k money (it’s a private account, so your brokerage may be using some of it), nor is it telling you what you can or can’t do with your money. However, the government is discouraging you from spending your retirement nest-egg before you retire. You opened a private account with certain well-known rules that allow you to put aside retirement money pre-tax. It’s a contract. You want out of the contract, you pay the penalty. That is all.

]]> http://www.a401kwithdrawalrules.com/what-are-the-conditions-for-401k-hardship-withdrawal-rules/comment-page-1/#comment-10 Brian Fri, 21 May 2010 06:44:24 +0000 http://www.a401kwithdrawalrules.com/?p=24#comment-10 Why should anyone that has a 401k be charged a penalty if they take out their money? I mean does the Federal Goverment give us the money back when the Stock market goes up and down and we as Americans lose money? No, the are not held acountable so why should we. My wife and I have a outstanding Medical Bill and a couple of other bills that total $9,000.00 and we just wanted to pay them off using our 401K it's our money but, yet the Goverment tells us what we can and can't do with it, What's up with that? It's not like we were going to empty the whole thing but, with the way the Goverment is using my Money and telling me what I can and can't do with my Money makes me think what is really going on in America? Why should anyone that has a 401k be charged a penalty if they take out their money? I mean does the Federal Goverment give us the money back when the Stock market goes up and down and we as Americans lose money? No, the are not held acountable so why should we. My wife and I have a outstanding Medical Bill and a couple of other bills that total $9,000.00 and we just wanted to pay them off using our 401K it’s our money but, yet the Goverment tells us what we can and can’t do with it, What’s up with that? It’s not like we were going to empty the whole thing but, with the way the Goverment is using my Money and telling me what I can and can’t do with my Money makes me think what is really going on in America?

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