Home  >  Financial Articles and Q&A  >  Need to withdraw five thousand dollars?

Need to withdraw five thousand dollars?

May 05, 2013 by nestor from Bridgeport, CT in  |  Flag
5 Answers  |  6 Followers
Follow Question
2 votes
Andy Tilp, CFP® Level 16

Nester,

I assume you are wanting to withdrawal the funds from your 401k. The others have made good points.

Another thing to consider is, if you leave your employer, either voluntarily or involuntarily, the loan is very likely to be due, in full. This means you need to pay the entire balance back.

If you do not pay it back, you will likely have a 10% tax penalty. On $5000, that means you would owe an additional $500 in taxes. Ouch!

Comment   |  Flag   |  Oct 26, 2013 from Sherwood, OR

1|600 characters needed characters left
1 vote

Nestor, contact HR to see if they allow loans. If not, you will have to take an early withdrawal. That means you have to pay income tax plus a 10% penalty. Either go to Hr; they will give you the number for the plan administrator who will get you processed.

You should only do this if it is a real emergency. This is meant for your retirement, and it is a real expensive way to go.

Comment   |  Flag   |  May 07, 2013 from Delray Beach, FL

1|600 characters needed characters left
0 votes

BrightScope is just a website that aggregates data. They are not the custodians for your 401k, IRA, or bank accounts.

For help on withdrawing money from your accounts, check your statements for the phone number to call or talk to the people who helped you start your account, like your HR department or financial adviser.

Comment   |  Flag   |  May 05, 2013 from Las Vegas, NV

1|600 characters needed characters left
0 votes

If you are looking to withdraw funds from your 401(k) account, be careful. There may be penalties and taxes due for an early withdraw that is not emergency related. If you are looking to borrow funds from your account, there are different rules for paying the money back. Check with your human resources department or 401(k) custodian for more information specific to your company's plan.

Comment   |  Flag   |  May 05, 2013 from River Hills, SC

1|600 characters needed characters left
0 votes

Some plans may offer a loan from your account balance. The money would have to paid back with interest to your account with after tax money. So, it is not always the best idea. If you have exhausted all other avenues, you would need to contact your HR department. They should be able to guide through whatever choice fits your situation the best.

Comment   |  Flag   |  May 06, 2013 from Lititz, PA

1|600 characters needed characters left