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Asked 11/20/2008
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Can I withdraw money from my 401 without the 10% early withdrawal penalty to pay my house off? I was permanently laid off this week. I am age 52 and my 401 is a company one at John Hancock. It is all my money. There was no company match. This would be considered a hardship with my loss of wages. |
Answer 1/1 - Submitted 10/23/2009
No.. the penalty does not apply only for the following circumstances:
You are permanently disabled.....(proof must be sent w/ distribution)
If you over the age of 59 1/2 or 55 and terminated from employment.
The payout will be coded as early withdrawal and subject to the penalty otherwise..
When you file your taxes you may be able to avoid if it was used to pay medical bills that exceed 7% of your income.
WHen you take the distribution it will be reported tothe IRS as an early withdrawal and they will be looking for the penalty
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