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Old 09-26-2010, 08:44 AM
 
27,230 posts, read 27,295,133 times
Reputation: 45752

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;ust what is it? Is it something like retirement or some type of savings? I don't think its been around forever because it wasn't until about 12 years ago in all my years of working that I can recall hearing about it.
I just read someone elses thread on how they make about 7K a month and are way in over their heads, yikes, it takes me months to make that amount! Long story short I learned recently I finally have enough from this job to pull from it for hardships (they told me I had to have a minimum of 1k in there) and was seriously thinking the need to pull out to get caught up and get out of thiss 'black hole' trap I got stuck into also. What would be the outcome of pulling from it? I don't spend like crazy, most everything I own is thrift store, rarely buy lunch at work, and don't make enough for my own apt so I rent a room. But having to take cash advances recently has put a damper on my checks now and it really is one big circle. Rather than go into a whole big spew of a story I will say I've had to bail the original renters out of a few things (not jail of course) when I can barely keep myself going but because I live here, pretty much had to put out to keep things from being shut off. As it stands I've been trying to sell my music gear, I don't really have anything more of any value to sell, and need to get out of this 'cash advance' loop once and for all. If I could afford to move right now yes, I'd have done it, with roomies that pay the utilities on time.
Long story short, what will be the outcome of pulling from my 401k to get caught up?
By the way, no, I don't have medical or life insurance so that's two major debts less, I can't afford those options anyway. And in this economy, looking for a higher paying job is an option, assuming I can jup right into one right away but quitting before finding another job wold be stupid.
Any input, as to whethe or not, to take from my 401k, as right now its my only bailout?

Last edited by country pride; 09-26-2010 at 08:55 AM..
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Old 09-26-2010, 08:53 AM
 
105,688 posts, read 107,663,235 times
Reputation: 79324
taxes and penaltys if your under 59-1/2 will eat up a bit of it. depending on your tax bracket and local taxes it can be up to 1/2 although you sound like towards the bottom of the range.
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Old 09-26-2010, 09:38 AM
 
20,793 posts, read 61,073,556 times
Reputation: 10691
It sounds like you must be contributing something to your 401K if you have money in there-if so, I would take that money and get health insurance first. The number one reason people file bankruptcy is medical bills. As far as taking money out of your 401K, it depends-you will have to pay taxes on the money you take out and a 10% penalty so plan on almost half of that money gone between state/federal taxes and penalties. If after that, is it worth it to you to take the money out? Not knowing your financial situation, no one can really answer that question. Once you get back on your feet, start contributing to your 401K again. Another option to help dig yourself out would be to take a part time job. Many stores are starting to hire for their Christmas season and will most likely work around a daytime job schedule so you work nights/weekends.
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Old 09-26-2010, 10:17 AM
 
27,230 posts, read 27,295,133 times
Reputation: 45752
Yeah I already knew about being taxed on it and already work retail with a very unsteady schedule. Days, mids and closing, no set schedule or shift every week. But I have feelers out right now for side jobs (I'm an electrician) for my days off and if something doesn't turn up soon, can always sell all my tools along with my music gear, which is already up for sale now anyway.. But those of you who offered suggestions, thanks. Will keep reading here for other thoughts.
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Old 09-27-2010, 02:01 PM
 
30,855 posts, read 36,746,227 times
Reputation: 34384
Quote:
Originally Posted by 115db View Post
;ust what is it? Is it something like retirement or some type of savings? I don't think its been around forever because it wasn't until about 12 years ago in all my years of working that I can recall hearing about it.
I just read someone elses thread on how they make about 7K a month and are way in over their heads, yikes, it takes me months to make that amount! Long story short I learned recently I finally have enough from this job to pull from it for hardships (they told me I had to have a minimum of 1k in there) and was seriously thinking the need to pull out to get caught up and get out of thiss 'black hole' trap I got stuck into also. What would be the outcome of pulling from it? I don't spend like crazy, most everything I own is thrift store, rarely buy lunch at work, and don't make enough for my own apt so I rent a room. But having to take cash advances recently has put a damper on my checks now and it really is one big circle. Rather than go into a whole big spew of a story I will say I've had to bail the original renters out of a few things (not jail of course) when I can barely keep myself going but because I live here, pretty much had to put out to keep things from being shut off. As it stands I've been trying to sell my music gear, I don't really have anything more of any value to sell, and need to get out of this 'cash advance' loop once and for all. If I could afford to move right now yes, I'd have done it, with roomies that pay the utilities on time.
Long story short, what will be the outcome of pulling from my 401k to get caught up?
By the way, no, I don't have medical or life insurance so that's two major debts less, I can't afford those options anyway. And in this economy, looking for a higher paying job is an option, assuming I can jup right into one right away but quitting before finding another job wold be stupid.
Any input, as to whethe or not, to take from my 401k, as right now its my only bailout?
A 401K is basically a retirement savings account that the government gives you a tax break for putting money into. A 401K will give you different invesment options, usually funds (called mutual funds) that invest in stocks & bonds. Other options will basically operate as cash savings accounts, although they typically don't come with the iron clad guarantee of a bank CD.

Taking money out of your 401K is generally a HORRIBLE idea. Just because it's allowed and a lot of people do it, doesn't mean its a good idea. In many cases it's better to go bankrupt rather than raid your 401k. 401Ks are normally protected from bankruptcy.

You will be taxed heavily (federal, & state income tax, plus 10% penalty) for taking out of your 401k. That's probably 35% of your balance gone right off the bat.

It sounds like you've got some other underlying problems in your life that money is not going to solve. EG...bailing people out with money you don't have sounds more like a problem with social or emotional roots to it. Find a way to solve those underlying problems without unsing money....because throwing money at such problems will not work anyway.
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Old 09-27-2010, 10:20 PM
 
Location: California
44 posts, read 154,242 times
Reputation: 61
" Rather than go into a whole big spew of a story I will say I've had to bail the original renters out of a few things (not jail of course) when I can barely keep myself going but because I live here, pretty much had to put out to keep things from being shut off."





It appears in the original poster's paragraph that the person(s) they are renting from arent paying the utilities and that leaves him/her to have to pay the extra to keep them from getting shut off. What do they do with the money? I may be wrong, but just my point of view. Sorry if Im incorrect. Hopefully its not something for social reasons.
I could suggest finding other roommates that pay the bills with the given moneys and focus on surviving.
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Old 10-03-2010, 02:21 PM
 
Location: Midwest
29 posts, read 169,607 times
Reputation: 54
Question, I have a pretty good job but no 401. I am 51 and realize I am in deep do do. I am looking for a new job but we all know how hard that is now. Is there a way that I can put some savings into a 401 type account on my own?
Thanks, EC
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Old 10-03-2010, 02:52 PM
 
15,630 posts, read 26,110,200 times
Reputation: 30907
Quote:
Originally Posted by ElizabethCollins View Post
Question, I have a pretty good job but no 401. I am 51 and realize I am in deep do do. I am looking for a new job but we all know how hard that is now. Is there a way that I can put some savings into a 401 type account on my own?
Thanks, EC
If you have earned 6K this year, you can put 6K into an IRA -- a regular IRA, so you can deduct that OR a ROTH IRA which you pay the taxes on and it earns tax free. Or even split the difference and do both, as long as you don't go over 6K. (5K for those under 50)

Don't assume the ROTH IRA is the better deal. In our household the ROTH IRA isn't -- we have little in tax write offs so a regular IRA really helps us save in taxes.
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Old 10-04-2010, 03:09 AM
 
105,688 posts, read 107,663,235 times
Reputation: 79324
tax wise for most of america roths may not be the best way. after all how many people do you know will be in higher tax brackets with no paychecks then they are with not only 1 but probley 2 paychecks coming in.

they are fabulous though if you think you will have money left for your kids as roths are great tools for passing tax free money on and on for generations.
thats their real benefit.
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Old 03-09-2012, 09:09 PM
 
Location: In The Thin Air
12,566 posts, read 10,545,719 times
Reputation: 9247
I didn't want to start another thread for this. My wife and I have $250,000 total in our 401ks together. I am 41 and she 36. Our company matches dollar for dollar up to 10%. We both work for the same company and we both contribute at least enough for the maximum match. At this point in our lives are we doing ok?
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