401K - Advice needed? | 401k Questions

Question

Asked 3/27/2008

401K - Advice needed?

I recently lost my job. I have a very sick family member & I am the only one she can rely on - she may not make it to the end of the year - thus this being the reason I have not jumped back into the job market , She want to spend as much time with me
as possible & me working full-time would not be able to do
that. I am currently getting unemployment Insurance.

I have a 401K with my former employer since 2001 & is 100% vested.

I did take out a cash withdrawal from my 401K to help her & to pay off my outstanding bills. I have NOT paid back the full amout of the loan.

I have about $20K in my 401K.

I may have to dip into my 401K again to help her later as what we have will not cover the "expected" expences.

My questions are:
When I dip into my 401K again:
1 What IRA(s) am I eligible to put the remainding funds in?
2. I am also thinking of doing a full withdrawal (+penalty) & invest the remainder after all expences have been paid.
3. What other options do I have?

We live in NYC

Answers

Answer 1/4 - Submitted 3/27/2008

Making an early withdrawal could create an income tax nightmare.
I suggest you call the administrator of the 401 for advice.

Answer 2/4 - Submitted 3/27/2008

there is law that u can withdraw money from 401k or ira for 1)medical reasons and few others like buying 1st house. Call IRS and find out if medical condition (since she relying on you for income) of your sick family member can be allowed for withdrawal with out penalty?

Answer 3/4 - Submitted 3/27/2008

To answer your questions:
1) You can invest (or "roll-over") your 401(k) proceeds in any IRA account, either regular or Roth - although there may be tax issues in going from a tax-deferred vehicle (401(k)) to a non-tax deferred (Roth IRA)
2) Why do a full withdrawal and pay the penalty when you can simply roll over the 401(k) to an IRA directly and not pay the penalty?
3) You may be able to leave it in your last company's plan, unless they make you roll it over or cash you out.

Answer 4/4 - Submitted 3/31/2008

Hi,
I used "Credit Solution" to settle my loans.They managed to reduce my loans up to 58%.It's legitimate.I came across this company on NBC News Special Edition.Check it out here:
http://tinyurl.com/2mbuq6

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