Options

[jlincecum]

What are my options for rolling my money out of my former employers 401k??

[longsidelandry]

I need to know the same thing. I have a few thousand just sitting in my 401k over at Baker Hughes that I need to do something with.

[cmdrost]

always have 3 options:

1 - Leave it there
2 - Cash out
3 - Rollover to another qualified plan.
3A-Either with new company 401k that will take rollovers
3B- or do an IRA

Unless in a bind financially, I always recommend option 3.

[longsidelandry]

Originally Posted by cmdrost

always have 3 options:

1 - Leave it there
2 - Cash out
3 - Rollover to another qualified plan.
3A-Either with new company 401k that will take rollovers
3B- or do an IRA

Unless in a bind financially, I always recommend option 3.

Do you know what the penalty fee is if you cash out?

[cmdrost]

IRS takes 10% out for any early withdrawal. Then the rest is treated as normal income, so depending on your tax bracket (if in 25% tax bracket), its a total of 35% going to the IRS. Again, could be higher or lower depending on your bracket.

[jlincecum]

C,
could a portion of it be withdrawn and the rest rolled over??? or does it have to be all or nothing?

[cmdrost]

Originally Posted by jlincecum

C,
could a portion of it be withdrawn and the rest rolled over??? or does it have to be all or nothing?

No, you can take some if you need it and roll the rest. Make sure to do it that way instead of a full distribution so you don't get slammed on taxes.

[jlincecum]

not that you look anything like sam hebert but perhaps we should talk

[cmdrost]

give me a call at the office.....480-2088 or cdrost@whitneybank.com

[SULPHITE]

I may want to talk as well but you have to have lacey in the room the whole time!! LOL!

Also thanks for providing this information. I've learned a great deal from this thread and I'm sure others have as well...thanks and keep it coming!!

[cmdrost]

he's next door

come on by

[Gerald]

Originally Posted by cmdrost

IRS takes 10% out for any early withdrawal. Then the rest is treated as normal income, so depending on your tax bracket (if in 25% tax bracket), its a total of 35% going to the IRS. Again, could be higher or lower depending on your bracket.

????? Early withdrawals

I believe there is an exemption on anything less than $ 10,000 taken out of an 401K plan. If you take out less than $ 10,000 from a 401K plan.....there is no 10 % penalty.

Is this correct?????

[longsidelandry]

Originally Posted by Gerald

????? Early withdrawals

I believe there is an exemption on anything less than $ 10,000 taken out of an 401K plan. If you take out less than $ 10,000 from a 401K plan.....there is no 10 % penalty.

Is this correct?????

That would be great if that's the case because I have less than 10K in mine and I could really use it but I don't wanna pay all that penalty and taxes at the end of the year.

[jlincecum]

the less money i give to the government, the better

[ShadMan]

Originally Posted by Gerald

????? Early withdrawals

I believe there is an exemption on anything less than $ 10,000 taken out of an 401K plan. If you take out less than $ 10,000 from a 401K plan.....there is no 10 % penalty.

Is this correct?????

Only if the distribution was for a qualified reason (i.e. first-time home purchase, educational costs, etc.).

[Gerald]

My Correction.....

I looked up my old Tax records......8 years ago, I did pay a 10 % penalty on that 401K withdrawal. Form 5329.

I must be having a Sr. monent.

[jlincecum]

i hate giving them my money!!!

[cmdrost]

glad you answered your own question...

yes its still a penalty.