Do I get taxed AND penalized if I withdraw money from my 401k early?
Or do I just pay taxes at whatever my current tax rate is?
Answers
581 points
jillybeansisme answered 3 months ago …
You get both taxed and penalized unless you can proove medical hardship such as cancer.
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3086 points
EthanR answered 3 months ago …
Intern, check out the link below, it will explain your options.
http://www.rr-useyour401k.com/
2547 points
Oldman answered 3 months ago …
Excellent answers above. Please go to the IRS site and read the exceptions for "no-penalty" withdrawals & loans. First-time home buyers, medical necessity, etc., have limitations.
Generally, if you are still working and contributing to the 401K, a 10 % penalty applies and the amount withdrawn is taxed at marginal rates. If you are out of the 401K plan, by job-loss or retirement, the Age limitation for penalty-free (but still marginally taxable) rules apply...if you are over age 59&a half.
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