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Asked 5/12/2009
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Can I sue some of my pension and 401K to pay bills and then rollover the rest I have a pension and 401K that totals about 81,000. that I have to rollover from a former employer. I am 51 yrs old and earn about 22,000 per year file single and no dependents. I need to pay off a large charge card for about 16,000. How much do I need to take out of my rollover to pay this and cover the taxes now and when I file next spring. |
Answer 1/2 - Submitted 5/13/2009
Ok.. If $16,000 is being made out to you , taxes will be 20% ($3,200) -- they should take that out when you withdraw the funds... (a 401(k) has to).. so you may want to ask for $16000 NET... or 19,200 plus any distribution fees....
The penalty you will have to pay next year (10%) or ($1,600)--- the administrator in most cases can take that out for you and send to the IRS so you will have all taxes and penalties paid up front...(you can ask them or indicate on the distribution forms that you want a check for exactly $16,000 NET, and to please take out 30% total tax)
Depending on your state, they may have to withhold state taxes as well.
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