Members hangwire Posted January 12, 2007 Members Share Posted January 12, 2007 anyone? I am going to be moving money from my work's 401k which is doing NOTHING [no matching, barely adding a few bucks each quarter] into an IRA account, but taking some of that 401k money out without a penalty or tax? Looking for a rich person loophole Link to comment Share on other sites More sharing options...
Members Wilbo26 Posted January 12, 2007 Members Share Posted January 12, 2007 Sorry. From what I understand the only way to can get the cash is to cough some up to Uncle Sam. Link to comment Share on other sites More sharing options...
Members paydirt Posted January 12, 2007 Members Share Posted January 12, 2007 I'm pretty sure Wilbo is right. You can take out a loan, but you have to pay yourself back within a specified time. I do believe there are a few exemptions that allow you to withdraw funds (education I think is one). Other than that I think you have to pay taxes on the money. Link to comment Share on other sites More sharing options...
Members hangwire Posted January 12, 2007 Author Members Share Posted January 12, 2007 I'm pretty sure Wilbo is right. You can take out a loan, but you have to pay yourself back within a specified time. I do believe there are a few exemptions that allow you to withdraw funds (education I think is one). Other than that I think you have to pay taxes on the money. any idea where I can get info on those exemptions? or does anyone here know? Not to be a dick, but if billionaries nad play with a dirty hand, why can't a hard working fella like me get away with spending some of MY money to pay off my car loan Link to comment Share on other sites More sharing options...
Members lostandfoundpdx Posted January 12, 2007 Members Share Posted January 12, 2007 thats a good point, i kinda want to do the same, i just quit my last job where my 401k is set up, and i don't trust them with my moneys. i would rather put it into an IRA or just dump it on a credit card or something... Link to comment Share on other sites More sharing options...
Members gil1 Posted January 12, 2007 Members Share Posted January 12, 2007 You can transfer your money from an ex-employer 401K to a self-managed Rollover-IRA, but you can't put new money into that account - you'll have to start a new account, like a SEP-IRA, Keogh, or other to add any new money. As far as getting any money out, the others are right. You can take a loan, but only if your plan provides for it, and an ex-employer probably wouldn't, and you have to pay yourself back. I think cash for a first home, education and medical bills (might be wrong about that) are the only reasons you can withdraw without paying taxes AND a penalty, which will eat up about 40%. I did a Rollover and SEP IRA over at Vanguard, and have been very happy with it. You can buy individual stocks, mutual funds, etc. And the fees are very low. They have more info there. http://www.vanguard.com/VGApp/hnw/CorporatePortal Link to comment Share on other sites More sharing options...
Members Wilbo26 Posted January 12, 2007 Members Share Posted January 12, 2007 I always find this {censored} amusing...because they always tout 401ks as being awesome ways to save up money and all...but what good is it if you can't {censored}ing ever get it without losing a decent portion of the money you made on it? I'm thinking I might just take the cash and suck it up. I have one I need to deal with, and I'm not sure I want to put it in another place where I can't add or take it out. Link to comment Share on other sites More sharing options...
Members hangwire Posted January 12, 2007 Author Members Share Posted January 12, 2007 I always find this {censored} amusing...because they always tout 401ks as being awesome ways to save up money and all...but what good is it if you can't {censored}ing ever get it without losing a decent portion of the money you made on it? I'm thinking I might just take the cash and suck it up. I have one I need to deal with, and I'm not sure I want to put it in another place where I can't add or take it out. good for retirment I suppose... isn't that the trick? likeif you are over 65 then you can just transfer it into... like .... a checking account? Link to comment Share on other sites More sharing options...
Members hangwire Posted January 12, 2007 Author Members Share Posted January 12, 2007 ... I still work at the job where my 401k is... but not for much longer... if I took a "loan" from myself [god, that sounds so stupid ] and then left, what would happen? Link to comment Share on other sites More sharing options...
Members claydavis Posted January 12, 2007 Members Share Posted January 12, 2007 a 401k is a great way to save money if your employer matches. i've been out of the industry for a little bit now, but i'm pretty sure that you can co-mingle rollover and traditional ira funds now, meaning that you can roll over your 401k into an IRA and still contribute. 401k loans are purely up to the employer establishing the plan. there are exceptions that allow you to withdraw funds penalty free for 1st time home buyer, select educational expenses, and some medical expenses. otherwise, you pay a 10% penalty if you withdraw the money before you're 59 1/2, and it's taxed as regular income, on 401Ks and IRAs. the penalties are meant to discourage withdrawals, as the accounts are supposed to be retirement accounts. -clay Link to comment Share on other sites More sharing options...
Members paydirt Posted January 12, 2007 Members Share Posted January 12, 2007 You can roll over your 401K money from your old company into another retirement vehicle. Maybe your new company has a 401K plan or you can change over to an IRA. But the purpose of the account is for your retirement. The only way for it to grow large enough to do you any good is to keep adding money to it and not take any out. If you need some funds, look elsewhere. Sorry Link to comment Share on other sites More sharing options...
Members hangwire Posted January 12, 2007 Author Members Share Posted January 12, 2007 You can roll over your 401K money from your old company into another retirement vehicle. Maybe your new company has a 401K plan or you can change over to an IRA. But the purpose of the account is for your retirement. The only way for it to grow large enough to do you any good is to keep adding money to it and not take any out. If you need some funds, look elsewhere. Sorry so how does Ken Lay or [fill in corperate CEO goon] do it? that is my question, not a need for a definition. Plus, I think that if a company stops "matching" or adding to the account, you should have the right to take your business elsewhere... and elsewhere should include your personal account Link to comment Share on other sites More sharing options...
Members Wilbo26 Posted January 12, 2007 Members Share Posted January 12, 2007 a 401k is a great way to save money if your employer matches. i've been out of the industry for a little bit now, but i'm pretty sure that you can co-mingle rollover and traditional ira funds now, meaning that you can roll over your 401k into an IRA and still contribute. 401k loans are purely up to the employer establishing the plan.there are exceptions that allow you to withdraw funds penalty free for 1st time home buyer, select educational expenses, and some medical expenses. otherwise, you pay a 10% penalty if you withdraw the money before you're 59 1/2, and it's taxed as regular income, on 401Ks and IRAs.the penalties are meant to discourage withdrawals, as the accounts are supposed to be retirement accounts.-clay Ah ok...that makes sense. But here's my issue...I have an old 401k from a previous job...but when I become elligible for the 401k program at my new job here in a few months I can't include my old one...so is it worth it to have two retirement accounts if one of them isn't going to get any contributions from my job? I'd rather just pay into the one my firm matches, so should I just take the 10% hit or what? Link to comment Share on other sites More sharing options...
Members hangwire Posted January 12, 2007 Author Members Share Posted January 12, 2007 Ah ok...that makes sense. But here's my issue...I have an old 401k from a previous job...but when I become elligible for the 401k program at my new job here in a few months I can't include my old one...so is it worth it to have two retirement accounts if one of them isn't going to get any contributions from my job? I'd rather just pay into the one my firm matches, so should I just take the 10% hit or what? it is more of a 40% hit from what i gather 10% penalty which THEY keep, and 30% they take taxes out... I wonder if you can refuse and just keep the 30% in a savinsg account and pay teh tax yourself at the end of the year... I don't want too many comapnies touching my money... Link to comment Share on other sites More sharing options...
Members claydavis Posted January 12, 2007 Members Share Posted January 12, 2007 a lot of 401ks will allow you to roll funds in now. if that's not an option, you can roll it into an IRA, or you can take a distribution. if you don't mind the penalty plus taxes, you can take the distibution. if it's a sizeable amount, though, i'd roll it over or just take a partial distribution. Link to comment Share on other sites More sharing options...
Members Wilbo26 Posted January 12, 2007 Members Share Posted January 12, 2007 it is more of a 40% hit from what i gather 10% penalty which THEY keep, and 30% they take taxes out... I wonder if you can refuse and just keep the 30% in a savinsg account and pay teh tax yourself at the end of the year... I don't want too many comapnies touching my money... {censored} that's what I was afraid of if thats the case...but even then...its mostly money my old firm put in there so technically I'm not out anything...oh what to do. Link to comment Share on other sites More sharing options...
Members Cougar Hunter Posted January 12, 2007 Members Share Posted January 12, 2007 how do billionaires get any advantage? Under 50 years old,they are only allowed to contribute 15K a year to a 401k. They can only contribute 4k a year to an IRA. they aren't allowed any more distribution options than you either. hardship exceptions are for higher education for you or a child, buying a new home, disability, and MAYBE death of a spouse? the newer pension laws allow money to be freely transferred between individual IRA's, simple IRAs, 401k's, and 403B's. be careful though, try to make your transfers from holding co. to holding co.. If you get a check and hold onto it fr more than 30 days, you're paying a 10% penalty to the IRS + income taxes on the distribution. Link to comment Share on other sites More sharing options...
Members gil1 Posted January 12, 2007 Members Share Posted January 12, 2007 I always find this {censored} amusing...because they always tout 401ks as being awesome ways to save up money and all...but what good is it if you can't {censored}ing ever get it without losing a decent portion of the money you made on it? I'm thinking I might just take the cash and suck it up. I have one I need to deal with, and I'm not sure I want to put it in another place where I can't add or take it out. You CAN take it out, when you're 65, without penalty. Taxes are deferred till that time, so you make investment interest on the full amount, and are taxed on widthdrawals at your lower, retirement rate. You can transfer it to a self-managed fund with no penalty or taxes, so if you have a 401K sitting at an ex-employer, you could switch it over to your own, self-controlled Rollover-IRA, which allows you to pick form a wider range of mutual funds and stocks. And you can set up a seperate IRA for new deposits. I think you can even put money into a Rollover IRA if you want, but then you can't Roll THAT over into a new employer's 401K if you wanted to do that, because then the funds would be co-mingled. Link to comment Share on other sites More sharing options...
Members Wilbo26 Posted January 12, 2007 Members Share Posted January 12, 2007 You CAN take it out, when you're 65, without penalty. Taxes are deferred till that time, so you make investment interest on the full amount, and are taxed on widthdrawals at your lower, retirement rate.You can transfer it to a self-managed fund with no penalty or taxes, so if you have a 401K sitting at an ex-employer, you could switch it over to your own, self-controlled Rollover-IRA, which allows you to pick form a wider range of mutual funds and stocks. And you can set up a seperate IRA for new deposits.I think you can even put money into a Rollover IRA if you want, but then you can't Roll THAT over into a new employer's 401K if you wanted to do that, because then the funds would be co-mingled. Yeah I guess I just don't think dropping 300-400 bucks into its own Rollover IRA when I'm going to have a new 401k in a few months that my employer will match is worth it. I'll probably just go to the bank and see what they think...I guess having a couple of different investments is a good thing, even if it is just chicken scratch right now. Link to comment Share on other sites More sharing options...
Members gil1 Posted January 12, 2007 Members Share Posted January 12, 2007 Ah ok...that makes sense. But here's my issue...I have an old 401k from a previous job...but when I become elligible for the 401k program at my new job here in a few months I can't include my old one...so is it worth it to have two retirement accounts if one of them isn't going to get any contributions from my job? I'd rather just pay into the one my firm matches, so should I just take the 10% hit or what? You should be able to Roll your old 401K at you Ex Employer INTO your new 401K at your current employer, with no penalty or taxes. Then it's all under one umbrella, and new deposits will be matched by your employer. Then you can withdraw when you are 65 with no penalty, taxed at your lower retirement rate. Link to comment Share on other sites More sharing options...
Members Cougar Hunter Posted January 12, 2007 Members Share Posted January 12, 2007 witdrawls can start at 59 1/2 Link to comment Share on other sites More sharing options...
Members MickSlick Posted January 12, 2007 Members Share Posted January 12, 2007 There is a rule which lets you withdraw early without penalty, but you have to set up an estimated schedule, withdraw that amount each year and file with the IRS etc... and it may also involve minimum amounts. You can't take a lump sum though, Do a search and you will find it. Link to comment Share on other sites More sharing options...
Members Wilbo26 Posted January 12, 2007 Members Share Posted January 12, 2007 You should be able to Roll your old 401K at you Ex Employer INTO your new 401K at your current employer, with no penalty or taxes. Then it's all under one umbrella, and new deposits will be matched by your employer.Then you can withdraw when you are 65 with no penalty, taxed at your lower retirement rate. Nope I checked when I started here. I can't roll my old one into the new one. Link to comment Share on other sites More sharing options...
Members gil1 Posted January 12, 2007 Members Share Posted January 12, 2007 Nope I checked when I started here. I can't roll my old one into the new one. Hmm, odd. Oh, Well. Hell, maybe just roll it into your own, self managed, and you could make some deposits into it if you want, and that can be the account that you control the choices in. Link to comment Share on other sites More sharing options...
Members Wilbo26 Posted January 12, 2007 Members Share Posted January 12, 2007 Hmm, odd. Oh, Well.Hell, maybe just roll it into your own, self managed, and you could make some deposits into it if you want, and that can be the account that you control the choices in. Thats the thing...if I put money into the one I get at work they'll match it I believe...so it would be kinda dumb to not put all of my savings into that one where I get more out of it. The other one would just sit there idle, and its not enough money to really earn a decent amount of interest I don't think. Link to comment Share on other sites More sharing options...
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