If I do not with draw the minimum amount from my 401 k plan after reaching 701/2 what is the penalty
123964
Footnote to the footnote, unless you are continuing to work and are a 5% owner or greater including family attribution, then you still have to take the RMD.\n\nGood luck!
167571
I think you would be better off putting that 20k into a 90-day CD at or around 4.5%.  Thus eliminating the chance of losing it.
437127
You would be charged an over the limit fee every single month you were above 3K... I hope you can pay it off fast, otherwise you are going to pay alot of finance charges. I don't think they can "punish" you though... just charge you and maybe close your account to new purchases.
383740
An early withdrawal of an IRA will mean severe tax consequences. You may can borrow other money from somewhere to pay your bills but there is no such thing as a Retirement Loan. If you withdraw it before age 59 1/2, you will have to claim it as ordinary income plus there is a 10% penalty tacked on for the withdrawing of it that the custodian (fund co., broker, etc.) must collect for the gov't. For your future's sake, don't do it.  Good Luck!
605464
should not affect your unemployemnt (unless you are cashing out -- which is a terrible idea).  you need to set up a new IRA account -- go for a Roth IRA at a discount brokerage like Muriel Siebert, e-trade, charles schwa, usaa if you are military -- and have the new account contact your company to do the transfer -- if your company cuts you a check to then transfer funds to new brokerage firm you will get stuck with taxes -- serioulsy don't tap the 401k money, you will be penalized and that is needed to grow for your future -- good luck!
280882
10% penalty plus taxes...so, yeah, at least 30% penalty. \n\nProject returns 50%....which will be taxable, right? So, if you are in 25% bracket, you lose 25% of your return...so, now you are down to a net gain of 37 1/2%.\nSo, it costs 30% to access your money to make a 37 1/2% return....\ntherefore...\nyou net 7 1/2% return. My guess is....you stand a decent chance of making 7 1/2% INSIDE the 401/k and saving yourself all the hassle of moving the $$ around.
254834
You will be greatly penalized if you tap into that 401K now. If you can make it without tapping into it you will be much better off. You can roll it into an IRA and not be penalized. In the process of rolling it into an IRA you can arrange to have some of the money for living expenses but it will cost you.
215958
Most (Many) retirement accounts have two contributors - You and your employer.\n\nYour contributions (together with gains/loss) are always yours.\n\nThe employer contributions, usually have a VESTING schedule. That is, they contribute, but do not allow you to have all of the money immediately. Unfortunately, it means if you leave the company after 1 year, you get your money, and a portion of your employer contributions.\nSo it could be like this: Year 1 20%, year2 40% and so on until year5 where it is 100% - this is when your year end balance will equal the vested balance. So if you left the company after year 5 you would get your money plus all the company contributions together with any gain/loss.\n\nLook at your retirement plan documents - or even call your HR department and ask them for further detail.\n\nGood luck
72981
I am not sure exactly what your question is asking.  If you retire at 55, but need to access your IRA money right away, you should look into IRS rule 72t.  There are a few different methods of doing this and you need to sit down with a tax advisor to make sure that you do it right.  Click this link for an article that has more info\nhttp://ktla.trb.com/business/yourmoney/sns-yourmoney-0403moneytalk,0,7524444.story\n\nGood Luck!!!
26042
good question.  401k's are excellent vehicles for preparing for retirement.  The greatest part about them is that usually your company gives you free money when you participate, called a match.  The way it usually works is that you decide how much, either dollars or a percentage of your income, you want to put in to the plan.  Then you decide which investments to pick (this can be tricky without knowing what they offer).  Ask the person offering the plan to help. Use a mix.\n\nWhatever you put into the plan is deducted from your income.  Heres an example:\n\nYour income:               $40,000\nContribution amt:   5%:    $2000 \nCompany match 50c per $:   $1000 \nup to 5%                    \n\nTotal contribution:        $3000\n\n(New taxable income:$38,000)\n\nIf you do this until normal retirement age of 60 and get a 10% return on your money over that time, you'll end up with almost $1,200,000.  \n\nSince now youre only taxed on $38,000, when you decide to retire and get your money you have to pay taxes on all the money you take out (not the whole $1.2 million unless you take it all at once).  If you take it out before your 59 1/2 you will have to pay an additional 10% penalty on whatever you take out. There are exceptions.\n\nThese are pretty much the pros and cons, but if you start now and stay consistent you'll be able to retire very comfortably.
422645
If you scr.w yourself by taking and closing ( to your hands) the 401k .you lose up to 40% of your money before you touch it. Then it can and will be Garnished for the full amount you owe. Can you say ZERO cash?\nLeave the 401k alone until you can open an IRA and directly rollover to it. NEVER touch the money - You lose. BIG Time lol
337360
You will pay a heavy price for taking money out of your 401(k).  Between the early withdrawal panalty (10%) and the taxes (20-30%), you will lose a LOT in this process.\n\nIf you have debt, you may be eligible for hardship from your creditors.  Call them before they start calling you.  See if you can defer payments for a few months.  Interest will continue to accrue, but they see that you are willing to work with them and may work with you.\n\nTry to get some type of job, even if it's not in your field (delivering pizzas, retail sales, fast food), to pay living expenses (food, shelter, transportation, clothing).  Anything you make above this can go to creditors.  Remember,  your living expenses are more important than your credit score.  Don't starve yourself to keep a good credit score - it's not worth it.
554696
A roth account might be good or bad for you.  They're not good for everyone.\n\nA 401k or IRA is just a type of account, and has nothing to do with how much of a return you can get from your investment.  If you are investing in mostly a diverse mix of stock funds, you should expect a long term average return of 7-9%.  In some years you will get more (like 13%), and some years you will lose money).  In either type, you'll be investing in a mix of mutual funds.  The benefit of a roth IRA has to do with taxes.\n\nHere's the benefit:  With a 401k or traditional IRA, you pay no income taxes now on the money you put in.  You pay income taxes when you withdraw the money in retirement.  With a roth IRA, you pay the income taxes now, and pay no taxes on the money you withdraw in retirement. \n\nIf your income tax rate is lower now than it will be in retirement, you do not want a roth account.  If your income tax rate will be higher in retirement than it is now, then a roth account would be good for you.\n\nHERE'S HOW YOU SWITCH:\nYou "rollover" your 401k balance to a traditional (pretax) IRA.  That means you tell the company that has your 401k to transfer the money directly into an IRA.  As long as you don't receive a check payable to yourself, you'll pay no taxes or penalties.  You then "convert" the traditional IRA to a roth IRA.  This is something the company that handles the IRA does for you.  Basically, they take taxes straight out of the IRA and send them to the IRS.  This makes the money in the IRA after tax, or "roth" money.\n\nBUT...\n\nTo be able to transfer the money from the 401k to the IRA, you'll have to have already stopped working for the company.  AND your company might have the "roth 401k" feature, which allows you to contribute to your 401k plan with after tax money and have exactly the same benefit as the roth IRA.  ALSO if your company matches your contributions to your regular 401k, that will probably outweigh any benefit you could possibly get from the roth IRA.\n\nYou need to talk to the company that manages your 401k plan to find out what your options are.  And call a company that does IRAs to find out more details on the roth IRA to find out if it would be a good fit for you.  Try Fidelity or Vanguard.
354
You didn't say what the penalty was for (late filing, late payment, interest, trust fund penalties, etc.). Nor did you state who is handling your dispute (IRS Appeals, Collection Due Process, Tax Court). There's slightly different rules depending on what's going on.\n\nThe basic process for handling penalties and disputes is outlined on the IRS website.\n\nIn general, the IRS will investigate whether you are responsible for the penalty, and will send up a notice informing you that the penalty was waived or that you really do owe the penalty. Interest will accrue if you really do owe the penalty, but you haven't paid it yet.\n\nGenerally, I advise my clients to pay all penalties in full, and then dispute the penalties. This shows a good faith effort, and stops additional penalties and interest from being added to the account. If we lose the dispute, at least the client paid only the penalty and not additional interest. If we win, the client gets his money back.\n\nI hope this helps. Let us know how your dispute with the IRS turns out.\n\nBest wishes.\n\nWilliam
436984
You can actually draw all of it at age 59 1/2 without penalty but you will have to pay income taxes on the tradtional IRA but not the Roth.  The mandatory withdrawal starts at age 70 1/2 and is a formula based on your life expectancy.  The company you have the account with can give you the minimum you must withdraw each year to meet the IRS rules.
663626
They will automatically take out 20% for income tax, plus a 10% penalty. Also you have to figure in your income tax bracket; ours is 28%
666439
When you exercise Incentive Stock Options (ISOs) and sell them immediately, you recognize ordinary income. So you will have income of 4000 x $8 = $32,000, which will be taxed at ordinary rates.\n\nOn the shares you do not sell, if you hold them for two years from the date or grant and one year from the date of exercise, you will qualify to recognize the income from the sale as long-term capital gain. However, you recognize income for purposes of the Alternative Minimum Tax at the time of exercise. So, 16,000 x $8 = $128,000 will be added to your AMTI. If you pay AMT because of this, you may get part of it back, as a credit, in later years, because when you sell the 16,000 shares it will be a reduction to your AMTI.