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Question about our 401k options....
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<blockquote data-quote="browniehound" data-source="post: 370594" data-attributes="member: 4653"><p>PackageStud, (LOL)</p><p> </p><p>I'm not sure that is entirely accurate. My understanding is you CAN take withdrawals before 59.5 and even 55 without penalty. But to do so, you would need to determine your life expectency. Then, you must make equal yearly withdrawals up until that age.</p><p> </p><p>For example, you are 49 and determine you life expectency will now be 80 years old. If you want to start withrawing at age 49 penalty free, you will need to make 31 equal, yearly withdrwals.</p><p> </p><p>To simplify my example, your 401k balance is 310,000 at your 49th birthday and you wish to retire. To withrdraw penalty free, you could take $10,000 each year for 31 years.</p><p> </p><p>I don't know how your life-expectency number is calculated. Me not knowing where this number comes from shows that I'm not entirely confident that I'm 100% correct in this 401k fact.</p><p> </p><p>I have read it on more than one occasion and in the tax laws that come with my own 401k statement.</p><p> </p><p>Can someone please confirm that this a legit penalty-free withdrawal option? And if there is an expert here could you please go into detail about the life-expectancy number?</p></blockquote><p></p>
[QUOTE="browniehound, post: 370594, member: 4653"] PackageStud, (LOL) I'm not sure that is entirely accurate. My understanding is you CAN take withdrawals before 59.5 and even 55 without penalty. But to do so, you would need to determine your life expectency. Then, you must make equal yearly withdrawals up until that age. For example, you are 49 and determine you life expectency will now be 80 years old. If you want to start withrawing at age 49 penalty free, you will need to make 31 equal, yearly withdrwals. To simplify my example, your 401k balance is 310,000 at your 49th birthday and you wish to retire. To withrdraw penalty free, you could take $10,000 each year for 31 years. I don't know how your life-expectency number is calculated. Me not knowing where this number comes from shows that I'm not entirely confident that I'm 100% correct in this 401k fact. I have read it on more than one occasion and in the tax laws that come with my own 401k statement. Can someone please confirm that this a legit penalty-free withdrawal option? And if there is an expert here could you please go into detail about the life-expectancy number? [/QUOTE]
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