Monday

4 Main 401k Withdrawal Rules Without Penalty

401K Withdrawal Rules
By Candis Reade

401K Retirement Plan was created in order for those working individuals to have a good substantial amount to have with when they retire. Yes, you have set aside a part of your income in order for you to live a life you want to live when you reach the age of retirement or when you want to retire from working. However, what if you are into a financial emergency, you need a substantial amount to pay for your medical bills and other expenses, what you should do? It is suggested that you should only withdraw money from your 401K only when you do not have any option left. Remember, you are slashing money out from your future, and if you will always do this withdraw and withdraw money from your retirement plan you will be shocked, there is no money left for you when you retire. Be sure you know the 401K withdrawal rules before withdrawing the money. It is not as simple as withdrawing money from the atm machine.

You should be familiar with 401K withdrawal rules before you decide on withdrawing money from your retirement plan. Most likely, the retirement plans of which working individuals have will only allow withdrawal only if it is under the so-called term financial hardships. What are these? Most of the reasons that are classified under such term are: death of the workers spouse or a big medical bill.

Most of the employers set up 401K withdrawal rules based on the guidelines that the Internal Revenue setup. This means that when you are in dire need of cash immediately, then supported with a reason under financial hardship, you are eligible for such withdrawal.

Here are four reasons that under 401K withdrawal rules that would allow you to make a withdrawal:

1. When you incur a surmountable amount for medical bills either for your spouse, family or even you.

2. Preventing the foreclosure of your home.

3. Purchasing a house which will become your primary residence, this excludes paying your mortgage.

4. Paying for school fees either for post-secondary or university for your dependents, spouse and children.

One of the 401K withdrawal rules that you should remember is that when you withdraw money based on the reasons mentioned above you will be suspended from making any annual contributions for the period of 6 months. Remember, when you need cash that getting money out from your 401K retirement plan will affect your future. It should be your last resort.

Candis Reade is an accomplished niche website developer and author.
To learn more about 401K withdrawl rules, please visit Early Retirement Plans Today for current articles and discussions. Article Source: http://EzineArticles.com/?expert=Candis_Reade http://EzineArticles.com/?401K-Withdrawal-Rules&id=1603964

401k Withdrawal to Ensure You Have Enough Retirement Money

401k Withdrawal - How To Ensure You Have More Than Enough Cash For Retirement
By Josh Neumann

A 401k withdrawal is obviously essential once you reach retirement. However, in order to live the retirement lifestyle of your dreams, you need to make sure you have enough money in your 401k in the first place, so when you go to withdraw the money, you have enough after tax dollars to support you.

The 401K plan is a way in which the worker puts a portion of their income into a retirement pan, and often times the employer will match that up to a certain point. This is often a very effective retirement planning mechanism, because it allows the employee’s funds to grow free of tax until they conduct a 401k withdrawal.

These 401K tax deductions may also be converted over to stocks, mutual funds, and bonds. Some firms will also allow the tax deduction to be used to purchase the firm’s shares that you work for. Believe it or not, you can also set up a 401k if you own your own business, although many aren’t aware of that. There are two varieties of a 401k plan-a trustee version and a participant plan.

With the trustee 401K plan, someone is appointed to look after where the 401k investment money is put into. With the participant plan, on the contrary, the employee themselves has the option to decide where they want their money to be placed.

Again, some companies will put their own money into your fund to encourage you to save more for retirement, although not every company will do this. Most 401ks will allow up to 15% of your income to be directed into your 401k.

Although it may be difficult, especially when you see the money growing and thinking of what you could purchase with it, don’t take the money out until you hit retirement. Not only will you incur an early withdrawal penalty (usually 10%), you will also be charged income tax on the funds you withdraw.

However, if you delay until you reach 59 ½, you incur no such penalties, so wait to take the money out! Hopefully, these 401 withdrawal tips have helped you with your 401k plan understand. Remember, most people never have enough money to live the retirement lifestyle they’ve always wanted because of a simple lack of planning. They are then forced to either not do the things they wanted during retirement, or worse yet, continue working well into retirement just to have enough money to survive on.

Don’t be one of them. Follow these 401k withdraw tips, and you will have more than enough to live the retirement lifestyle you’ve always wanted.

To learn to invest money and for other investing advice, try checking out http://www.online-investing-tips.com. This is a popular investment site that gives money investment advice to help you achieve financial freedom. Article Source: http://EzineArticles.com/?expert=Josh_Neumann http://EzineArticles.com/?401k-Withdrawal---How-To-Ensure-You-Have-More-Than-Enough-Cash-For-Retirement&id=700438