i have $125000 in my 401k. i want to withdraw $30000 to get debt free.
after paying penelties and taxes how will this effect me on this year income taxes.
401k.withdraw vs 2011 income taxes:
The idea, of you paying off all your bills, is a really “smart investment” over the long term... This doesn’t matter trust me. It will all workout in your best interest! It's as good as it gets. What ever it is you want, out of this payoff, investment transaction. It will push you forward, with it saving you both time and money, long-term. Paying off your debt, is a good thing to do. You have an opportunity here, that most people can only dream of doing. So yes, you should go for it! Yes! it is time for you to enjoy the fruits of your labor. What ever it cost you in dollars, short term. It will be well worth it long-term... Think about it, what are you waiting for? What do you have to loose, vs what you have to gain? Either way it could be all gone, with you left wishing, you had done it your way. The choice is yours, live in the now or not. The idea of you paying off all your bills is a really smart investment, over the long term.
How to Withdraw Money Early From Your 401K - Without Paying a Penalty. If you’re looking for a short term answer to your financial difficulties, accessing your retirement funds is probably not the answer. It often takes months to determine eligibility and process all paperwork. The IRS has set up these rules to discourage accessing retirement funds and for good reason. Unless your reasons for withdrawing funds are due to emergency or extraordinary reasons, it’s rarely a wise financial move to borrow against your retirement finances. If you do need money from your 401K account, then a loan is preferable, ...Remember, your 401k is meant to provide retirement income, and should be a last-resort source of cash for expenses. The primary benefits of 401k loans is that the proceeds are not subject to taxes or the ten-percent penalty fee except in the event of default and no credit check is required to qualify, ...The benefit to your retirement account is that you will eventually get this money back in the form of qualified disbursements at or near retirement, and the interest you pay back into your 401k plan is tax-deductible. (long-term results) http://www.savingtoinvest.com/2009/11/4 … dship.html "represent and opinions only"
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