Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
keep in mind that while the irs said they will no longer require you to give the employer proof of hardship , you better well have it for them if challenged
keep in mind that while the irs said they will no longer require you to give the employer proof of hardship , you better well have it for them if challenged
I am sure there are more than a few that didn't have a hardship and made the withdrawal and a new car is in their driveway.
but the irs has warned about taking money with no hardship , they will be monitoring and randomly auditing .
plus it is so easy for them to cross check the money coming out and going in to an ira
What would be the point of moving money from a 401K to an IRA? The only thing I can think of is an IRA would have more investment choices than an employer plan.
What would be the point of moving money from a 401K to an IRA? The only thing I can think of is an IRA would have more investment choices than an employer plan.
could be lower costs , more choices and under your control .
i have never been able to mesh my 401k with my portfolio models because i can't hold the funds in them .
i transferred out my big 401k when i retired .
but being i work the one day a week when covid is not an issue i opened a new one and every cent i make goes right in .
but i can't mesh it with any of my models which are specific managed fidelity funds
you can take out up to 100k if you are impacted by covid with no penalty . they give you a few years to put it back .
i don't believe in touching that money pre retirement
I borrowed 6k from my 401k when I was just starting out because it’s the only money I had and I needed a partial down payment to get into the housing game. I probably made 60 to 70k of equity by making that choice, however, I did pay it back in about a year. In a sense that was lucky and also for forward looking opportunity. I know most people use these loans for consumption or to paper over past mistakes. In those cases, it’s almost always a terrible idea to mortgage your future.
I irresponsibly quit my first job out of college on the spot when I was disgusted with a few decisions they made for my career path. So I had to pay it back fast.
I’d like to think I wouldn’t make either of those poor choices today.
many do not realize that when they borrow money out that investment is liquidated .... you get a big goose egg on the outstanding balance .... a 401k loan can end up the costliest loan there is .
in effect a 401k loan over the last year that was in a total market fund cost you 22%.
it cost 15% a year on average the last 3 years and 15% yearly the last 5 years.
that is a very high cost to have borrowed money at
I borrowed 6k from my 401k when I was just starting out because it’s the only money I had and I needed a partial down payment to get into the housing game. I probably made 60 to 70k of equity by making that choice, however, I did pay it back in about a year. In a sense that was lucky and also for forward looking opportunity. I know most people use these loans for consumption or to paper over past mistakes. In those cases, it’s almost always a terrible idea to mortgage your future.
I irresponsibly quit my first job out of college on the spot when I was disgusted with a few decisions they made for my career path. So I had to pay it back fast.
I’d like to think I wouldn’t make either of those poor choices today.
It's unfortunate the 401k administrator didn't inform you that you were allowed to deduct up to $10k as a first-time homebuyer from your plan. No loan, no payback required, and no 20% withholding for taxes since this was allowed under the tax code for first-time homebuyers.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
