401k

[marc1817]

i currently have a partial loan against my 401k. i am in desparate need of money at this time. can i legally withdraw the rest of the money in my account? this is in the state of tennessee.

 

[ALawyer]

If the money in you 401(k) is yours and vested, you can withdraw it BUT you'll have to repay the loan and also have to pay federal and any state income taxes PLUS a 10% penalty if you are under 59.5 years old on whatever you withdraw. That's very expensive and can jeapordize your long term security. There is sometimes an exception for withdrawals made and repaid within 60 days, but ask the plan administrator about that, as you may have to roll it over to an IRA first.

 

[ShyCat]

Actually, not all plans allow hardship or other in-service withdrawals. Individual plans can be (and often are) more restrictive than ERISA allowance. ERISA's language is "may allow", not "must allow". You'll have to check with your plan's administrator or read the Plan Summary Description (SPD) that your employer must have provided.

 

[vrzirn]

In addition, you may also have to pay interest on "the loan" you took from the plan.

 

[troynsam]

Resist tempation!! Leave your money alone for now!! Taxes will eat you alive!!