What is the name of your state (only U.S. law)? NY
I am 52, my husband was 56. He passed away 2 weeks ago from an accident. He has a 401K and also an annuity from work? Which one can I draw on now and would have the least amount of penalties for me. I need to withdraw on one of them so that I can pay my mortgage and other bills. I am too young for social security and my income isnt much.
Hi,
I agree with the administrator, you should consult with your husbands HR department.
First and foremost, what is the reason that you need this money and what percentage of your current funds are you thinking of taking out? If you need this money to pay off credit cards or related unsecured debt, keep in mind that retirement assets are protected in a Bankruptcy.
Even though paying off unsecured debts might be the "Right thing" to do, because after all you did borrower the money. It may not be the smart thing to do. You need to think of your future and how much money you need for retirement.
A 401(k) typically has a 10% penalty for early withdraws. In addition, you are taxed on the profits of that amount of money. So if you took out $100,000 from the 401(k), you might have $60,000 cash after the penalties and taxes...it's just not worth it.
Annuties are the absolute worse investment a person can have, they simply make the sales person or financial advisor rich. You should look at transferring your annuities into a Roth IRA, IRA, or no-load mutual fund. You'll thank yourself in the future.
In the end, you need to sit down with a financial advisor that you TRUST, as well as a few family members, before you make any decisions. Do NOT rush this decision.
Also, keep in mind that if you withdrawal any money from the 401(k), you are withdrawing this money when the value of the 401(k) is at an all-time low. Wait a few years until this money is touched.