Has anyone done any all or partial withdraw from the 401k without a hardship? Seems every time I attempt to reach out to Vanguard or do anything on the site, it is blocked. I'd like to know my options, but seems Vanguard / UP makes it extremely difficult to touch the money.
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And remember that if you withdraw, it will raise your income for the year. So if you made 75k and withdrew 20k from your 401k, you now pay taxes on 95k, which potentially puts you in a new bracket, etc., so withdrawal, while maybe getting you out of a bind today, can lead to more hardship.
Here's some free advice:
First of all, the rules about taking money out of your 401k plan are made by the IRS, not by UP or Vanguard. UP and Vanguard have no say in the matter.
Don't take anything out if you can help it. Usually the best decision is to LEAVE IT ALONE. It's intended for retirement, not for getting by today.
You have the option to roll it over into an IRA Rollover account. If you roll it over, you can invest in all kinds of other things that are not available to you in the UP plan. BUT you must wait until age 59 1/2 to touch that money or you will pay the 10% tax penalty.
If you are anywhere close to age 55, then DO NOT ROLL IT OVER. Leave that 401k plan alone! Once you reach the calendar year in which you turn 55, you can take money out without the 10% penalty.
Also, anyone of any age, at any time, can arrange to take money out of an IRA or IRA Rollover account without the 10% tax penalty. It's called 72t distributions. You get a little money every month, for the rest of your life. You can increase the amount if you like, but you can never decrease it. You can't just pull out a big chunk of money. Not many people know about this option. It's there if you need it, and it's a lot better than pulling all of the money out in one shot, but it's not generally recommended.
Whatta c-appy company!
Vanguard told me that I had to roll over 401k to IRA since I don't wok for UP anymore. If you're under 591/2 years old there is a 10% penalty for early withdrawal
It's not UPs fault, 401ks are not supposed to be easy to withdraw from like a normal savings account.
You need to call Vanguard customer service and they'll help you. Any money you withdraw that has never been taxed will count as normal income, plus a 10% federal tax penalty, plus (in Nebraska) a 3% state tax penalty.
If you take out a loan you have to pay it back when you leave. So be careful.
If you leave you can take it BUT you need to roll it over into another 401k type account. Don't take the money directly or you ll have to pay tax penalties.
Get advice from a financial advisor.
What if you are agreement and furloughed?