Comments on: The Real Cost of Withdrawing Retirement Funds Early

By: double-E

double-E — Fri, 13 Apr 2012 15:52:08 +0000

I cashed out an IRA (Variable annuity) and the company charged a “surrender charge”. Can I deduct this as “Penalty on early withdrawl of savings” (line 30) even though I don’t have a 1099 for it?

By: Susan

Susan — Mon, 02 Apr 2012 06:49:00 +0000

Here is my situation, the company I worked for that i have my Pension plan in was bought out by another company. I have less than $2000 in that plan. I have come in some hardship and need to get some bills payed. I make min wage and could really use that money right now. I’m under 59 so I understand there’s a 10% tax that will be taken out if I withdraw early, but what other taxes will be taken out? I don’t get much back at tax time, but how will that affect me at the end of the year as far as having to pay taxes instead of getting a small refund?

By: Gail

Gail — Mon, 19 Mar 2012 15:52:29 +0000

I have been off work since Sept. due to Medical Illness & was given the OK to return to work this month. I have exceeded my FMLA time & have to work w/HR until April 8 to find another postion. If nothing is found I will be terminated. Unfortunatley I do not have money put aside in the event of job loss or any other kind of emergency. In about 3 weeks I will truely be penniless. Until the time that unemployemnt kicks in (my job has a tendency to drag that out for about 1-2 yrs) I have no other source of income/way of paying my bills. My only resort IS to take the money from my 401k plan & live off of that until my unemployment starts. Any advise on how to procede & handle this money once I get it. I now see the value of having @ least a years worth of monthy/yearly expenses set aside. Lesson learned, now how to be smart & successfuly move forward from here?

By: Ryan

Ryan — Wed, 04 Jan 2012 17:34:13 +0000

I recommend reading this article, which covers how to track down old 401k plans: Keep Track of Your Old 401(k) Plans.

By: clell moore

clell moore — Wed, 04 Jan 2012 17:30:40 +0000

I work at sibley’s shoes for 7years and the closed on 12/4/03 but I never got the chance to withdrawe my 401k how do I go by getting funds release

By: Ray

Ray — Fri, 30 Sep 2011 19:19:31 +0000

I will turn 65 next year and have just retired [at 64]. I received a two year severance package and won’t need to withdraw from my 403b for a couple of years. My question is: Should I withdraw enough funds from my 403b to pay off my house so that I won’t have to pay the loan interest on my house?

By: candy

candy — Mon, 29 Aug 2011 12:47:52 +0000

will i still be considered for the federal and state eic credit if worked but took out retirement 401k early? And if so, can they take out the tax penalty out of that? Will that money i got early affect how much i get for credit , if i didnt take it out, would be different?

By: Ryan

Ryan — Thu, 03 Mar 2011 15:33:08 +0000

Chris, in your situation, it might make sense. the key here is to make sure you do exactly what you plan to do – make the withdrawal, set aside the cash to pay the taxes and penalties, then pay off your debt. This will eliminate the 18% interest rate you are paying. There are two important follow up steps to make sure this works in your favor:

1. Change your habits to prevent debt from creeping back into your life. The first thing I would recommend after paying off your credit cards is to start an emergency fund. Many financial advisors recommend having several months of living expenses saved.

2. Begin making retirement fund contributions again, once you get your emergency fund in place.

These two steps will help you get your finances in order, give you a financial cushion, and help rebuild your investment portfolio. Again, the key is to follow through. Best of luck!