ANSWERS: 2
  • It is possible to withdraw funds from your 401(k) if your plan allows for hardship withdrawals. A hardship withdrawal means you can get money out for the purchase of a primary residence, you or your childrens' tuition, to prevent forclosure on your primary residence, etc. If you do take a hardship, you will have to pay a 10% early withdrawal penalty and any applicable taxes. Most 401(k)s will not let you continue to contribute until 6 or 12 months after your withdrawal. Also, this withdrawal will be considered income and will be reported to the IRS. You can also take a loan if the plan allows. There will be no early withdrawal fees because you will be paying the money back. However, they will charge you interest and probably a "fee" to do the loan. A loan is the best option if your plan allows them.
  • i was terminated from my job of 18(eighteen)years i would love to use my 401k acct. to purchase my primary home i currently rent. how can i do this? james at bomama@bellsouth.net

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