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Let me see if I have this straight: If I withdraw X dollars from my 401K, the company withholds 20% to send to the fed for my taxes as a penalty. However, if I replenish the money within 60 days, then the fed "gives it back" to me when I file my annual taxes?
Unless you have an exceptionally good reason to withdraw 401K funds, put it completely out of your mind. It is the worst idea you ever came up with., not only because of tax implications, but you lose money several ways.
One of the few exceptions I can think of, would to be to purchase a home. No other reason, even starvation is good enough.
We borrowed for a home purchase and had four years to pay it back, we paid it back and it worked out fine however, if you quit or get laid off, you have to immediately pay it back or pay huge penalties
There are so many things wrong about this plan, not worth listing them all. Go see a good financial advisor, but don't expect him to be on your side.. He will explain in a very nice way, it's a terrible idea...
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