Accessing your retirement funds comes with different rules, depending on whether it’s a 401(k) or an IRA.Based on your company’s rules, you can often borrow up to ,000 (or half your vested balance) from a 401(k) and repay it within five years —unless you leave the company sooner, in which case you have 60 days to repay or face tax consequences and possible penalties. The money you receive is an actual withdrawal, albeit a temporary one: You have only 60 days to re-deposit it, either into the same IRA or put a new one before it is considered a permanent withdrawal, with tax and potential penalty consequences.Personally I had no clue and had never even considered it but it got me wondering. I had to cash out my 401k for an emergency of some sort. you can structure it so that you repay on a quarterly basis over 5 years, but pay it off as soon as you are able.That's part of the reason why I got that Individual 401k I alluded to in my thread.401(k) retirement plans allow employees to save for retirement in a tax-deferred fashion.
The same applies to interest and growth if it accrues between the date of your wedding and the time of your divorce.In addition to a Traditional or Roth IRA (you could have both), many people maintain a 401(k) retirement account through their employer.These retirement funds may offer a large pool of cash to tap during an emergency or for other big-ticket items that have not be adequately saved for, such as college education, buying a home or starting a business.After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads. 10% distribution fee plus whatever your marginal tax rate is, plus whatever penalties your broker puts on you. That's why you wait until you retire to take distributions. Well I was speaking of say...I was laid off and couldn't find a job and had to resort to dipping into my retirement in order to keep things afloat. Obviously things would have to get real bad before that happened but it's just good information to know. "If you are laid off and need emergency funds but expect to be able to reattain your previous income, you could ask to borrow money from the 401k rather than liquidate.Somebody asked me the other day what the taxes would be like if they cashed out their 401k. So if you are making 0,000 a year and have to cash out your ,000 401k, you're a blithering.. The first year you might get reamed but in subsequent years your tax burden will be less than if you took a distribution during your peak years. Well I was speaking of say...I was laid off and couldn't find a job and had to resort to dipping into my retirement in order to keep things afloat. Obviously things would have to get real bad before that happened but it's just good information to know. There's no tax penalty for that if your employer allows it..