[Amanda]

I took out my 401k from a company I worked for and did 10% tax deducted when I did it. I found out my ex currently works there in a higher position.

It probably would never happen, but I was worried he could get a hold of my current info, where I live and all that. You obviously don’t marry the same person you divorce.

I was still worried about taxes on this, so I met with a financial advisor with h&r block today who does my taxes to ease my mind.

They advised there may be an additional 10% penalty but I could use some of the funds to pay off some debt. I had a bill come up from a complex I lived at with roommates.

Unfortunately it became clear my roommates were not going to help out.

It was only $385! But I didn’t find out about it until recently. I haven’t lived in that complex for at least a year! I was so pissed!! I was assured I could use the funds to pay that.

I also used some of it to cut my credit card debt in half. I should definitely be able to pay off my card this year, which is a goal of mine.

Then I won’t have that payment to worry about

[Taralyn]

To anybody reading this, I would not recommend this approach overall. Not only is there a 10% penalty to withdraw early, but all of that will be added to your gross annual income for the year and you will have to pay taxes at whatever tax bracket that pushes you into.

Financially, it’s better to roll the fund into a traditional IRA or into your new employer’s 401k, if they allow.

The penalty and the taxes are usually much higher than the interest you save by paying the debt.

[Francess]

get yourself a po box. dont go to your po box on a regular schedule. different time day etc. how are you paying your bills?

you might want to pay them with money orders or if possible through walmart.

try to distance yourself from your address as much as possible.

[Rebecca]

Off topic, but my parents remarried each other and so did my sister and her hubby.

[Patricia]

Good for you. You’re doing what you need to do. Keep on, your doing great!!

[Jennifer]

Did your company manage the 401k themselves? I’ve never heard of that. All my employers have had an outside company like Fidelity manage the retirement accounts.

The employer or its employees would have no way to access any of the retirement account info

[Melissa]

If you would have rolled over there would be no taxes. Think about moving into a ROTH Ira. Your FA can help.

It will close this account and your FA will handle it with your information. You will pay taxes but when you pull from it after age 59 1/2 thete will be taxes.

Prematurely, pulling from a 401/403 is a penalty and will also be taxed income.

There are exceptions your FA should know.

You can google it, alsi. There is a list

[Carol]

It’s rarely a good idea to take money from your 401(k), because of the taxes which are usually 20%, and the penalty which may be another 20%. Not to mention state taxes.

At least you paid off some debt with it, and that is a good thing, so when you get a new job put as much money in a new 401(k) as possible.

Also in a divorce situation, all assets must be known. So, it’s very possible a lawyer could get your information with or without your permission, and vice versa.

When you make big financial moves, get financial advice.

[Susan]

Also, speak directly to HR about giving your info to anyone. They can put a memo in your files. Better yet, send an email (so you have a copy) saying no info can be given to anyone.

Follow up with a call to assure they received (mark your copy with person, date and time) and they put it in your file!

[Linda]

You will pay a 10% penalty if you are younger than 59 1/2 if you don’t roll it onto another retirement plan. You needed the peace of mind to get it away from your ex.

Roll it into another retirement plan to avoid the 10% penalty if it applies to you and the taxes or if you need to pay down cc debt while not the recommended choice sometimes you gotta to what you gotta to.

The interest is higher than 10%. Good luck

[Summer]

As others have said, I think you are mistaken about the taxes and penalty you will pay for the 401 withdrawal – it will be way more than 10%! You need to talk to a reputable financial advisor about your specific situation and go from there.

I suspect that between the penalty – and state and fed taxes – you will lose over 40% of your funds to taxes – big loss! Best wishes with this.

[Patricia]

10% is not near enough tax withholding for this withdrawal. The year you took it out you will owe penalties, then normal income taxes for federal as well as State income taxes and it generally equates to almost 50% of the withdrawal.

Prepare for that when you file your taxes.

[Heather]

You will have a 10% penalty PLUS whatever the normal tax rate is for your income level.

Make sure to hold some aside in case you owe more at tax time

[Kl]

You will pay the 10% as a fine for with drawing before (59 1/2 or 70 1/2) in addition you will owe fed/state taxes when you file your return

[Author]

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