I was laid off from my job almost a year ago and I have done nothing with my old 401k acount as of yet .My current employer does not offer a retirement plan.
Here's my question: I need a short term loan - am I able to withdraw $5000.00 from it and then start up an IRA within 60 days without paying taxes on that
$5000.00 ?
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accessing old 401k
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 tl |
accessing old 401k |
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Posts: 1 (03/21/09 05:59:36) |
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ralexander |
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Posts: 58 (03/23/09 12:30:04) |
Yes, you can do that. It gets a little tricky. You have to request a cash withdrawal, so they will withhold 20% for federal taxes (required). Then you will be
able to deposit the entire amount into a bank account and use the funds as you please.
Then, within 60 days, the total amount deposited into your bank account must be deposited into your IRA (any amounts missing will be subject to income tax and 10% penalty). You will then have to prove to the company who withheld the 20% that the funds were rolled into an IRA and they will send you a rollover check for the 20%, which must be subsequently deposited into your IRA.
R. Alexander
lowcost401k.com |
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