Help with 401k

[Marilyn. 340]

My hubby has some money in a 401K with his current job.. the new job does offer 401K's but hubby doesn't know much about it yet...

I have no idea what is the best thing to do with this money....

My hubby is under the impression that as long as the amount is under 10,000 we don't have to claim it but I don't know if that is true or not...

Of course the money would sure come in handy but I really think we should reinvest it but I have no idea how to do it.. i tried a google search but I am eve more confused now

[GaryC 7]

My hubby has some money in a 401K with his current job.. the new job does offer 401K's but hubby doesn't know much about it yet...

I have no idea what is the best thing to do with this money....

My hubby is under the impression that as long as the amount is under 10,000 we don't have to claim it but I don't know if that is true or not...

Of course the money would sure come in handy but I really think we should reinvest it but I have no idea how to do it.. i tried a google search but I am eve more confused now

Unless your hubby is over 60 he will pay a 10% tax on any money he takes out. This is in addition to the 20-30% they will take out for federal and state taxes. If he will have a new 401K it would be best to roll that over into his new one. That way there is no taxes on it yet.

[Jenn! 918]

If the new job doesn't have a 401K then you could do a rollover IRA without any tax penalties, I think.

[one...two...tree 2,762]

I just rolled mine over into my current employer's 401K. If you cash it, they'll take a big chunk out of it for taxes. I did that once...it isn't worth it.

If you are thinking you could use the money right now, consider borrowing against your 401k - I think you can borrow up to 50 percent of what your 401k is worth and the interest rate is very low. I just did this - got a 5% interest rate and paid off a high interest credit card. You can even borrow as money to put down on a house. His HR person should be able to answer any of the details and restrictions.

[w¡n9Nµ7 §£@¥€r 123]

What everyone else said.

[Marilyn. 340]

I just rolled mine over into my current employer's 401K. If you cash it, they'll take a big chunk out of it for taxes. I did that once...it isn't worth it.

If you are thinking you could use the money right now, consider borrowing against your 401k - I think you can borrow up to 50 percent of what your 401k is worth and the interest rate is very low. I just did this - got a 5% interest rate and paid off a high interest credit card. You can even borrow as money to put down on a house. His HR person should be able to answer any of the details and restrictions.

we did the loan thing last summer and we are still paying it off...

he starts his new job next week Monday so even if we could take a loan out it wouldn't be doable.. ....

\that is my question hubby thinks that they won't tax it as long as it is under 10,000 , that is the part I am wondering about....

I would like to reinvest it though not cash it although the money sure would come in handy.. if we have to pay taxes on it and stuff it isn't worth it...

so if we want to reinvest it into the new job's 401k how do we go about doing that??

[w¡n9Nµ7 §£@¥€r 123]

Talk to both 401k administrators. They will tell you the details you need on the rollover check.

[Tyrobe 1]

My hubby has some money in a 401K with his current job.. the new job does offer 401K's but hubby doesn't know much about it yet...

I have no idea what is the best thing to do with this money....

My hubby is under the impression that as long as the amount is under 10,000 we don't have to claim it but I don't know if that is true or not...

Of course the money would sure come in handy but I really think we should reinvest it but I have no idea how to do it.. i tried a google search but I am eve more confused now

Unless your hubby is over 60 he will pay a 10% tax on any money he takes out. This is in addition to the 20-30% they will take out for federal and state taxes. If he will have a new 401K it would be best to roll that over into his new one. That way there is no taxes on it yet.

Agree with Gary here. It's best to rollover straight to the current employer's plan. When I switched my job, I rolled over to Chase's IRA and now it's hard for me to combine it into my current 401k account. For first-time homebuyer, you can withdraw 10k out of the plan without the early withdrawal penalty, but you still have to pay income tax of it.

[one...two...tree 2,762]

I just rolled mine over into my current employer's 401K. If you cash it, they'll take a big chunk out of it for taxes. I did that once...it isn't worth it.

If you are thinking you could use the money right now, consider borrowing against your 401k - I think you can borrow up to 50 percent of what your 401k is worth and the interest rate is very low. I just did this - got a 5% interest rate and paid off a high interest credit card. You can even borrow as money to put down on a house. His HR person should be able to answer any of the details and restrictions.

we did the loan thing last summer and we are still paying it off...

he starts his new job next week Monday so even if we could take a loan out it wouldn't be doable.. ....

\that is my question hubby thinks that they won't tax it as long as it is under 10,000 , that is the part I am wondering about....

I would like to reinvest it though not cash it although the money sure would come in handy.. if we have to pay taxes on it and stuff it isn't worth it...

so if we want to reinvest it into the new job's 401k how do we go about doing that??

They will definitely penalize you with taxes before the check is even printed - I say that from experience. I had just under $4,000 on a 401k from a previous employer and thought is wouldn't be too bad...they took out more than half.

Have him talk with his HR person and they'll help him. His new 401k financial company can also help with the rollover.

[Marilyn. 340]

I just rolled mine over into my current employer's 401K. If you cash it, they'll take a big chunk out of it for taxes. I did that once...it isn't worth it.

If you are thinking you could use the money right now, consider borrowing against your 401k - I think you can borrow up to 50 percent of what your 401k is worth and the interest rate is very low. I just did this - got a 5% interest rate and paid off a high interest credit card. You can even borrow as money to put down on a house. His HR person should be able to answer any of the details and restrictions.

we did the loan thing last summer and we are still paying it off...

he starts his new job next week Monday so even if we could take a loan out it wouldn't be doable.. ....

\that is my question hubby thinks that they won't tax it as long as it is under 10,000 , that is the part I am wondering about....

I would like to reinvest it though not cash it although the money sure would come in handy.. if we have to pay taxes on it and stuff it isn't worth it...

so if we want to reinvest it into the new job's 401k how do we go about doing that??

They will definitely penalize you with taxes before the check is even printed - I say that from experience. I had just under $4,000 on a 401k from a previous employer and thought is wouldn't be too bad...they took out more than half.

Have him talk with his HR person and they'll help him. His new 401k financial company can also help with the rollover.

I know my hubby.. he just wants out of there and probably won't want to talk to the HR person but i will talk to him about it

thanks for the help guy and gals

[GaryC 7]

I just rolled mine over into my current employer's 401K. If you cash it, they'll take a big chunk out of it for taxes. I did that once...it isn't worth it.

If you are thinking you could use the money right now, consider borrowing against your 401k - I think you can borrow up to 50 percent of what your 401k is worth and the interest rate is very low. I just did this - got a 5% interest rate and paid off a high interest credit card. You can even borrow as money to put down on a house. His HR person should be able to answer any of the details and restrictions.

we did the loan thing last summer and we are still paying it off...

he starts his new job next week Monday so even if we could take a loan out it wouldn't be doable.. ....

\that is my question hubby thinks that they won't tax it as long as it is under 10,000 , that is the part I am wondering about....

I would like to reinvest it though not cash it although the money sure would come in handy.. if we have to pay taxes on it and stuff it isn't worth it...

so if we want to reinvest it into the new job's 401k how do we go about doing that??

They will definitely penalize you with taxes before the check is even printed - I say that from experience. I had just under $4,000 on a 401k from a previous employer and thought is wouldn't be too bad...they took out more than half.

Have him talk with his HR person and they'll help him. His new 401k financial company can also help with the rollover.

I know my hubby.. he just wants out of there and probably won't want to talk to the HR person but i will talk to him about it

thanks for the help guy and gals

Steven is right. They will take taxes out even if it's under $10,000.

To roll your old 401K into his new jobs account you need to tell them that when he signs up for his new 401K. They will give him a form to fill out and send to his old 401K. They will transfer the money and you will not pay any taxes on the money transfered. You say you have a loan on your old 401K now? If so, when he leaves his old job and stops paying into that fund they will consider that a dispursment. The balance of the loan will be taxed and you will need to claim it on your taxes next year. They may even take the taxes out of what you have left in the old 401K but don't hold me to that. But they will tax you on the remainder of your loan balance.

[Marilyn. 340]

I just rolled mine over into my current employer's 401K. If you cash it, they'll take a big chunk out of it for taxes. I did that once...it isn't worth it.

If you are thinking you could use the money right now, consider borrowing against your 401k - I think you can borrow up to 50 percent of what your 401k is worth and the interest rate is very low. I just did this - got a 5% interest rate and paid off a high interest credit card. You can even borrow as money to put down on a house. His HR person should be able to answer any of the details and restrictions.

we did the loan thing last summer and we are still paying it off...

he starts his new job next week Monday so even if we could take a loan out it wouldn't be doable.. ....

\that is my question hubby thinks that they won't tax it as long as it is under 10,000 , that is the part I am wondering about....

I would like to reinvest it though not cash it although the money sure would come in handy.. if we have to pay taxes on it and stuff it isn't worth it...

so if we want to reinvest it into the new job's 401k how do we go about doing that??

They will definitely penalize you with taxes before the check is even printed - I say that from experience. I had just under $4,000 on a 401k from a previous employer and thought is wouldn't be too bad...they took out more than half.

Have him talk with his HR person and they'll help him. His new 401k financial company can also help with the rollover.

I know my hubby.. he just wants out of there and probably won't want to talk to the HR person but i will talk to him about it

thanks for the help guy and gals

Steven is right. They will take taxes out even if it's under $10,000.

To roll your old 401K into his new jobs account you need to tell them that when he signs up for his new 401K. They will give him a form to fill out and send to his old 401K. They will transfer the money and you will not pay any taxes on the money transfered. You say you have a loan on your old 401K now? If so, when he leaves his old job and stops paying into that fund they will consider that a dispursment. The balance of the loan will be taxed and you will need to claim it on your taxes next year. They may even take the taxes out of what you have left in the old 401K but don't hold me to that. But they will tax you on the remainder of your loan balance.

no, we plan on continuing to pay that loan... we just have to make the payments ourselves instead of it coming out of our check...

[mawilson 2,133]

They will definitely penalize you with taxes before the check is even printed - I say that from experience. I had just under $4,000 on a 401k from a previous employer and thought is wouldn't be too bad...they took out more than half.

More than half??? How is that possible?

The early withdrawal penalty is 10% - and of course the remaining 90% is counted as taxable income,

but there's NO WAY they took out 50%.

[Marilyn. 340]

They will definitely penalize you with taxes before the check is even printed - I say that from experience. I had just under $4,000 on a 401k from a previous employer and thought is wouldn't be too bad...they took out more than half.

More than half??? How is that possible?

The early withdrawal penalty is 10% - and of course the remaining 90% is counted as taxable income,

but there's NO WAY they took out 50%.

probably because the vested balance was lower then the actual balance...

[Marilyn. 340]

Vested Balance: The value of an account which would be available to you if you were to leave your company. The vested balance includes 1) the amount of company matching contributions and any earnings you would be entitled to withdraw when separated from service, and 2) Your own pre or after tax contributions.