What is the name of your state? Texas.
I've recently quit a job where I had a rather large 401(k) (for my age, 25). I was putting a lot of money into it because of their 100% matching, and never really intended to leave it there for another 35-40 years. So, I'm trying to determine the best way to go about cashing it in.
At the same time that I quit, I signed a contract with the same company and now have to start worrying about self employment tax. So I'm concerned that I might have to pay self employment on any 401(k) withdrawals I make. Would that be the case, or do only normal taxes + penalty apply?
What I would really like to do is use the 401(k) to put a down payment on a first house and maybe pay off my car. Is there any way to reduce the tax hit I'd take for cashing it in? I think I read somewhere about rolling it over into an IRA and being able to withdraw $10k for a first house. Would this be the best option? Then maybe I could leave the rest alone until I see how this contract turns out (it's only for 6 months). I definitely don't want it to push me up into the 28% bracket if at all avoidable.
Once in an IRA, can I take withdrawals of any size at any time? I think with the 401(k) I either have to leave it, roll it over, or cash the whole thing in, right?
What would your advice be? Thanks in advance for any and all!
I've recently quit a job where I had a rather large 401(k) (for my age, 25). I was putting a lot of money into it because of their 100% matching, and never really intended to leave it there for another 35-40 years. So, I'm trying to determine the best way to go about cashing it in.
At the same time that I quit, I signed a contract with the same company and now have to start worrying about self employment tax. So I'm concerned that I might have to pay self employment on any 401(k) withdrawals I make. Would that be the case, or do only normal taxes + penalty apply?
What I would really like to do is use the 401(k) to put a down payment on a first house and maybe pay off my car. Is there any way to reduce the tax hit I'd take for cashing it in? I think I read somewhere about rolling it over into an IRA and being able to withdraw $10k for a first house. Would this be the best option? Then maybe I could leave the rest alone until I see how this contract turns out (it's only for 6 months). I definitely don't want it to push me up into the 28% bracket if at all avoidable.
Once in an IRA, can I take withdrawals of any size at any time? I think with the 401(k) I either have to leave it, roll it over, or cash the whole thing in, right?
What would your advice be? Thanks in advance for any and all!
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