I am wanting to use my 401k to pay off old student loans, but I don't want to be slammed with penalties. What is the best option for me? Any suggestions will be helpful!
204187
I'm not a financial advisor, so you should check on this, but I believe that you will pay early withdrawal penalties plus income taxes at your current base rate on whatever you take out for whatever reason before you are 59 1/2.\n\nYou can take a loan against it, but you'll  have to pay that back.  I think you can also divide the entire value by how many years you likely have left to live (from actuarial tables) and take annual "substantially equal payments" without penalty.  All in all, very, very bad idea to use 401(k) money before you are at least 59 1/2.  \n\nCheck the Motley Fool for sound advice on paying off your loans.
259070
Hello!\n\nMy name is Earl Catlin a financial adviser for 4.0 student loans.  On July 1st student loan interest rates will be rising to 6.8%.  It is best that you consolidate now at a lower interest rate that will also put you at lower monthly payments. For more information visit www.40studentloans.com.  If you decide to apply use my name as your financial advisor and you will recieve a free iPod if approved.\n\nThanks,\n\nEarl Catlin
406011
The other answers forget..\n\nRule 72 (IRS) allows u to pull the $$$ from IRA (assume it applys to 401k too)...\n\nIt allows u to get it before 59.5 with only taxes to pay if u do it over a specified period of time.\n\nFor example u pull 40k out but do 4k per year for 10 years.\nThis is a way get $ out before 59.5 without penalty.\n\nIRS recongizes that there are life events that force many to grab funds from existing sources for emergencies.\n\nU could use this rule to pull out 100% of the 401k, and use portion for wife and portion for self.
20931
OK, you CANNOT roll a 401k account directly into a Roth IRA. You can roll your money into a Traditional IRA and avoid any taxation and penalties. (Definetly a good idea.)\n\nYou could then convert your Traditional IRA to a Roth IRA, but in doing this you would have to include the amount you convert as taxable income (pay income tax on the full amount). This may push you into a higher tax bracket, depending on your income and the size of your account.\n\nAssets in a Traditional IRA will be taxed when you withdraw them in retirement while the Roth IRA assets can be withdrawn tax free in retirement. Speak with a financial planner to help decide which choice is best for you.
189215
You can't go bankrupt on student loans!! Get over it.  They will eventually collect all the money including interest one way or the other.  Worst creditor in the world.  Figure out how to pay it back as soon as you can.  They are now garnisheeing Social Security Retirement and Disability Checks!!  So even if you still owe something at age 65 they will continue collection against you. One of few debts you cant go bankrupt on.  Even the IRS will negotiate with a taxpayer.  Not the student loan folks full payment full interest.  It will only get worse if you don't make payments.
47815
If your time horizon (retirement date) is more than 20 years out, its best to invest in a 401k plan rather than invest in a taxable plan.  The reason is that the 401k has certain tax advantages which allow you to defer current taxes out into the future which gives you more money to compound earnings against.  Also, if you are an employer, you dont pay employer taxes against the money invested in the 401k plan.
490390
Unpaid 401k loans are treated as a distribution.  You have to pay regular income tax on the amount borrowed plus a 10% penalty.\nIf you can't pay it back, take the hit and move on.  It was your money anyway.  BTW usually there are better ways to take out a loan.  The advantage to a 401k loan is you pay back the interest to yourself.  Plus they take the payments right out of your check.\nNot bad at all.  But I prefer to leave my retirement money alone for when I retire.  But your situation doesn't sound so bad.  How much was it for?  Maybe you could alter your witholding at your new job so you won't have to shell out at tax time.  (You could file 0 dependants and have them withhold a few dollars extra.)  You just have to figure what wasn't paid back as additional income and roughly figure the tax on that.  Plus 10% of the distribution.\nShould be roughly one third of the outstanding balance.  Not the end of the world.
483004
You ask for a deference or forbearance. Most student loans are deferred till 6 months after graduation anyway, and if you haven't found a job by then, you just call up the owner of your loan and request an extension. Forbearance is sort of the same, but leans more toward the 'hardship' part of not being able to pay.\n\nSomething you should know though (and it's quite important) is that:\n\nEven if you defer or forebear, interest WILL continue to accrue (unless you have a Federal subsidized loan)... actually, I believe that even if you do have a Federal Subsidized Loan, interest continues to accrue AFTER the 1st deferment term expires.\n\nYou should also maybe look into a 'Sliding Scale Payment Plan", which allows you to make your payments according to what you're making/worth. For instance, if you have a part time job, your first year of payments will be REALLY low, and they increase with time.\n\nThe BEST way to go about this though, is to contact your lender, and find out what your options are. They're usually very helpful with such things.\n\nPS: If you have federal loans, you might want to look into consolidation AS WELL as deferment... Good luck.
276702
FYI: I solved my school tuition cost problem by working for an employer who offers 100% tuition reimbursement.  Also, did you know that some student loans are forgiveable if you work in an improvished area for a designated amount of time.
24166
Yes, of course.  Just ask your administrater for a witdrawal.  You can also take a loan against your 401k.
227690
I had and IRA with them for the last 6 years.  I have since move it to Fidelity because it didn't do well, and my adviser wasn't keen on keeping me up to date.  On finsishrich.com, the site of David Bach, he has resources you can use to find a good adviser.
16326
The 401k is great if the employer provides some kind of match.  If you are looking to buy some government bonds, I would go with the I bond which currently has an interest rate of 6.73%\nCheck out http://www.treasurydirect.gov for more info.
633918
If they cut the check to you directly no one would know the better. I would caution you against this. Think about it, you're using a loan to pay off another loan. I hope that this doesn't come across as sounding judgemental but ask yourself if you can possibly get by without either the car or something else in your life that is putting you in this position. I have seen too many young people come out of college with these huge student loans that follow them for decades after they have graduated. Many of them are forced to take jobs that they hate just to be able to pay off their student loan. Please try to limit the use of debt in completing your education. I promise you that your life will be much easier down the road if you do. Good Luck
204282
I just spoke to the principal of an international school about this last week.  His school has worked out a Roth with an office that is in a U.S. territory nearby.  The tax is prepaid so there's no tax or penalty paid at retirement.  Email a investor in the Mainland to see what they can offer.  Some offices are just ignorant of the law, as most folks are for most things like voting, taxes, shipping things to people who are abroad.  You may want to email an investment group someplace like the Virgin Islands, Guam, Puerto Rico...  They're more familiar with policies and retirement programs for Americans living outside the Mainland.
290229
If you could provide a little additional information, that would help.  What kinds of student loans do you have?  Have they been consolidated? Are you a teacher?\n\nIf the loan is private, there isn't much that you can do to lower your rate -- most private loan rates are variable meaning that they change with the market and, sometimes, with your credit.  \n\nIf your loans are federal I have to ask: Are you sure the rate is 8.5%??  Federal Stafford loan interest rates have been capped at 8.25% for years.  And the only way your rate would be FIXED that high there would be if you had consolidated when rates were at an all-time high (the last time rates were that high was in 1999).  \n\nIf you haven't consolidated yet, consider doing it right away -- it's the easiest and safest way to (1) lower your monthly payments and (2) lock in a low interest rate while still maintaining the protection of the Federal student loan programs (just make sure you apply for a *Federal* Consolidation Loan).  When you consolidate, any eligible, Federal student loans that you have will be lumped into one new loan, your rate will be fixed at today's rate (5.3% if you're consolidating only Stafford loans) and your repayment term will be extended out beyond the standard 10-year repayment term (for a loan of $46,000, you will probably receive 25 years to repay). Extending your repayment term will mean that your monthly payment will be lowered (often significantly).\n\nIf you have consolidated, the only way that you can re-consolidate is if you...\n\n(1) borrow a *new* Federal student loan (probably not a wise decision, financially, as it wouldn't change your overall rate much)\n\n(2) if you "have been unable to obtain a Federal Consolidation Loan with income-sensitive repayment terms acceptable to [you]," you can obtain a Direct Consolidation Loan, which is the other type of student loan consolidation that the federal government offers. \n\nThis might be your best option. Just make sure that your current loan is a Federal Consolidation Loan (if it's already a Direct Consolidation Loan, you're out of luck). If it is, check the Dept. of Ed's website to see if you are eligible: http://loanconsolidation.ed.gov/borrower/beligible.shtml . There's no credit check on these loans, so it can't hurt to try!\n\nThere are private companies out there that claim to be able to "reconsolidate" any federal consolidation loan. These companies are SO disreputable that I hesitate to even mention them. DON'T DO IT. They're in business only to make money off of you. Many of them don't even deal in Federal Consolidation Loans, so you could end up with a "reconsolidated" private loan with horrible terms and none of the benefits and security of the Federal student loan that you started with.\n\nFinally, about student loan forgiveness: loan forgiveness is almost always not an option for someone who has consolidated, so you will need to make the choice between Loan Consolidation and Loan Forgiveness.  Before deciding, keep in mind two things: \n(1) interest rates are on the RISE and scheduled to rise to 6.8% in July, so if you want to consolidate, you should do it before July 1\n(2) Forgiveness (a.k.a. "cancellation") of Stafford loans is rare unless you are a teacher in a low-income area.  To see if you qualify for teacher forgiveness, read this site carefully:\nhttp://studentaid.ed.gov/PORTALSWebApp/students/english/teachercancel.jsp?tab=repaying\n\nBy all means, if you qualify, go for it!
196656
I'd choose royce premier (ryprx)   I have that part of my 401k that they offer at work and for the last year, ( March 2005-2006)  it went up 33.57%.  Plus its 18.74 each share so that would be around 53 shares.   So far since Jan 2006, it went up 11.15%
200807
401(k) have a maximum amount of contribution so you would have to check what is that amount. And Im not sure if you can contribute a lump sum. I know that if you have a traditional IRA, you have until April to put in any last minute contributions for 2005, so probably the same can be done.\n\nAs for legal ways to reduce your tax, I mean if you itemized and have your own property, you can deduct the real estate taxes and mortgage interest paid in the property. Also you can deduct medical expenses, charitable contributions, union dues, tax preparation fees, unreimbursed employee expenses. If you live in state where there is a sales tax, you can deduct such amount either by entering the exact value of sales tax you paid or using the IRS tables to calculate an amount. Also if you recently bought any vehicle or boat in 2005, you can also deduct the sales tax on that purchase. \n\nWhat else, oh yeah, if you live in area that was affected by the hurricanes, an area that has been designated by the IRS as a disaster area, you can take other several deductions that can help you out. \n\nIf you have any student loans, you can deduct the interest on those loans. Or if you still go to school, you can deduct the tuition expense.\n\nIf I knew a bit more info on you I could probably help you out more.\n\nHope this helps!