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401K withdraw advice......

merseyside8

Bluelighter
Joined
Jul 17, 2017
Messages
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So I have this dilemma I need advice on. I have a 401K and I contributed a lot of money to it past 6 years. I?m 27 now. I just got another job and my last day is this Wednesday, Feb 21st and I start my new job on March 5th. I?m a little short on cash because I had no insurance and used all my money on doctors to better myself which I am completely getting better but I?m not really worried about it because I know in my new job I?ll be perfectly fine as it pays really well. I want to have a trip before I start my next job. I was thinking of taking out money on my 401K. I know there?s a penalty to it. Should I withdraw money and take the penalty and just raise my % on contributions when I start my next job? I hope I?m making myself clear. I really wanna go on a trip. I?m planning on going to Europe. I love going there.

Any advice is welcome. I?m also completely oblivious on stuff like this. My company matched I believe a quarter to every dollar I put in.
 
i'd advise against it. i took cash out of my 401k about 15 years ago. when i consider what i did with it then and how much it would have appreciated if i had not taken it out, it's a no brainer. if your new job pays so well, put it on a credit card and pay it off in as little time as you can.

alasdair
 
i'd advise against it. i took cash out of my 401k about 15 years ago. when i consider what i did with it then and how much it would have appreciated if i had not taken it out, it's a no brainer. if your new job pays so well, put it on a credit card and pay it off in as little time as you can.

alasdair

I agree with Alasdair, do not take it out. You have been building for a long time and it makes absolutely no sense to withdrawal any of it. Always look at that money as untouchable. As Alasdair said, you can put it on your credit card(s) and pay it off as soon as you can. An alternative is to get a personal loan to take your trip. The hit of 10% for withdrawing the money early makes absolutely no sense and you will also lose the money you would make on it if you left the money where it is as well. If you have good credit cards with a low interest rate, it will cost you less to use those to pay for the trip, or if you are a member of a credit union, the rate to borrow the money may even be less than the credit card(s). Overall, anywhere you get the money to pay for your trip will be be a fraction of what you will lose if you take the money out of your 401K. Good luck with this and have a great trip!
 
Yeah, that money will be worth so much more in the future if you leave it alone, like multiple times more. Totally not worth it to take out. You have good credit? Nothing wrong with putting a trip on credit and paying that back in installments. It's certainly better than cashing out your retirement. Any new money you put in will only start to grow now. The reason a 401k is so effective is because the money from the beginning gets to multiply so much. If you started it 10 years later the end result would be a lot less retirement.
 
Well that’s part of my problem as well as I don’t have good credit. It sucks that I don’t. I mean I only wanna take about $5,000 out. Was wondering if I can put it back in when when I’m done? I doubt I’m gonna use even half of it to be honest. I just wanna go to this trip financially comfortable. My new Company contributes about $.25 on the dollar. Was just wondering if it’s possible to deposit a lump sum of that much money back in my 401K (I know the company won’t much that lump sum) . I sure don’t wanna go to those predatory lending places. I’m not sure how else I can do this and I need to think of something quick as I wanna leave on Thursday or Friday. I talked to Fidelity and they said they can give me my money by Thursday. I see that this is quite common to do, withdrawing money. But we’ll see. Thanks on the info guys! Appreciate it.
 
I think the final payout was said to be like $6200 but I know I miss out on the projected total that money can make.
 
you can?t just put it back. it?s not common to pull money out of a 401k. you pay income tax plus a penalty on that money; if your next job pays well you?re immediately losing 30+ percent of however much you withdraw to the government. market just took a significant hit. by withdrawing you also cement those recent loses.

you cannot make ?lump sum? deposits into a 401k. it?s a paycheck deduction. and paychecks cost money in a sense so you can?t put in full paychecks. even if everything goes to plan ? which it often doesn?t ? it?s not reasonable to think you can go from broke to depositing the majority of your paycheck into a 401k plan.

putting a vacation on a credit card (without having the full balance available in cash) is a bad idea as well.
 
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