https://www.fool.com/investing/2020/09/24/3-reasons-to-take-a-401k-withdrawal-right-now-and/?source=isafpbcs0000001&utm_source=flipboard&utm_medium=feed&utm_campaign=firehose
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Keep your 401k invested. Do not take it out. I started putting money in my 401k when I was hired in 1983. I consistently put in when the market was down. I consistently put in when the market was up. When my kids were no longer financially dependent on me (4 years ago), I started maxing out my contribution. I was a 1st level management employee with nobody under me (tech development). Two weeks before I took my layoff (by request), my 401k broke $2,000,000. My 401k is my independence and my ability to request early retirement. It is worth more than triple my pension. Unless it's an emergency, keep putting your money in your 401k or IRA.
Post below is correct, however, most people who make the withdrawal will not pay the money back into the 401(k) and will therefore owe the taxes on it, which they can spread over three years, from 2020 through 202
Incorrect, you will Owe the taxes for 2020. However you have the option to replace the 401k withdrawal over the next 3 tax years and claim the credit for the taxes paid in 2020. Go to the IRS web site and read for yourselves.
follow me for some serious tax scams
You can only withdraw $100k, by 12/31/20, and spread the tax over 3 years, if the withdrawal meets the COVID-19 criteria for the withdrawal.
Unless tax rates go up in the following 2 years. Lots of reasons to pay it off over 3 though.
Spread the tax over 3 years? Hmm so Ican roll my lump into 401k, and withdraw it it and spread the tax bill out at a lower rate! Glad u posted this thx.