I got layoff from my work 2 months ago after 20 years of my employment with this company in the U.S. My 401k is still with the company and I want to move it to Roth IRA but can't I was told by an accountant who manage my 401k that since I have an outstanding balance against my 401k, it would have to be deduct from it and I will be panelized and pay tax on what ever the amount that was deducted even while I was still working some of the amount on my paycheck have been garnished to pay toward the outstanding balance with interest.
is this right and if you have any good advice for me please don't hesitate to post it for me, thank you .
I got layoff from my work 2 months ago after 20 years of my employment with this company in the U.S. My 401k is still with the company and I want to move it to Roth IRA but can't I was told by an accountant who manage my 401k that since I have an outstanding balance against my 401k, it would have to be deduct from it and I will be panelized and pay tax on what ever the amount that was deducted even while I was still working some of the amount on my paycheck have been garnished to pay toward the outstanding balance with interest.
is this right and if you have any good advice for me please don't hesitate to post it for me, thank you .
Don't touch your ROTH-IRA account untill you have worked at least 40 years and retire at the age of 70 years old otherwise you will be taxed and penalized and lose some of the money you have been saving in the account. Consult this matter with your tax accountant.
Depend on how much your money in your 401 account is. If your account is less than 50 Thousand Dollars just leave it there, don't touch it, if not necessary to use it. You should withdraw all of your money if your account is over 50 thousand Dollars and up. In this present time of economy down you might lost big time of your money.
Also depend on your age too. If you're in mid 50 years of age or older you better withdraw all of your money now. I have seen many people in mid 50 years of age have no chance to spend their own money that he or she tried to save for 20-30 years, because they passed away before eligible age of withdrawing their 401K and receiving money from retirement plan. In this time of Economy is deep deep down you'll lost your money big time too, we don't know how long Economy is backing up, may be next 5 or 6 years never know. If you die before your money withdrawing, who's spending your money? Your spouse right? He or She will be enjoy spend the with his or her new lover.
Myself, I'm planning to withdraw my 401K when I am still alive at 55 years of age , and spend that money til the rest of my last breath.
I got layoff from my work 2 months ago after 20 years of my employment with this company in the U.S. My 401k is still with the company and I want to move it to Roth IRA but can't I was told by an accountant who manage my 401k that since I have an outstanding balance against my 401k, it would have to be deduct from it and I will be panelized and pay tax on what ever the amount that was deducted even while I was still working some of the amount on my paycheck have been garnished to pay toward the outstanding balance with interest.
is this right and if you have any good advice for me please don't hesitate to post it for me, thank you .
401k is your retirement account established while you are employed with the Company that you work for. You can select how many percent you want the Company deduct from your paycheck from 5%, 10% or 15%and the Company will match/contribute the dollars for you depends on the year that you have been working for the Company.
If you leave the Company in case you've got laidoff. You can rollover your 401k to a Regular Retirement Account (IRA) but, not Roth IRA in 60 days.
Yes, if you loan money from your 401K plan. you will have to pay the balance and will be penelized plus your yearly income tax. Due to the amount that you have been contributed to your 401k was pre-tax.
I suggest you review your 401k statement. what was the amount at the begining and wagt was the interest rate. How much is the amount has been decucted from your paycheck. You will know how much you have paid back and how much more you have to payoff the balance.
From what it sounds like you've a got loan or taken a distribution against your 401k account that needs to be repaid. Either you have to send them a check or they garnish from that you have. The interest though is paid back to yourself. Now, afterwards, if you take a distribution and if you're under 59.5 years old, you get hit with the 10% penalty and taxed on it as well.
A Roth account is an after-tax retirement account whereas your 401k is a pre-tax account. A Roth account would be beneficial if you think that you're going to be taxed more than you are currently while you're in retirement. Unless you plan on pulling out more income than you currently were/are, I don't think Roth is the way to go if you plan on keeping money in a sponsored plan. There are also some restrictions/rules.
Depending on how old you are and what you intend to do in the near future, you've got some options to decide on, depending on your risk tolerance.
I'm with "Achaan" though. I'm gonna start spending while I'm still relatively young enough to enjoy it, though my 401k and IRA accounts will be the last accounts I'll tap.
I got layoff from my work 2 months ago after 20 years of my employment with this company in the U.S. My 401k is still with the company and I want to move it to Roth IRA but can't I was told by an accountant who manage my 401k that since I have an outstanding balance against my 401k, it would have to be deduct from it and I will be panelized and pay tax on what ever the amount that was deducted even while I was still working some of the amount on my paycheck have been garnished to pay toward the outstanding balance with interest.
is this right and if you have any good advice for me please don't hesitate to post it for me, thank you .
After your termination from your ex-employer all outstanding loan against your 401k has to be paid in FULL. In general, the maximum loan allowed from the account is equal or less than 50% of the total amount. So, in the worst case scenario, you wil always have the other 50% of the balance available when you are terminated. The loan will be treated as distribution - which means you will paid tax on it and if you are less than 59.5 yrs old there will be a 10% tax penalty on it when you have to do your tax return next year. Here's an illustration : let's say you have $100,000.00 toal in your 401k, you can borrow up to $50,000.00, no more. In case you get laid off or fired that $50,000.00 has to be paid in full IMMEDIATELY. The $50.000 loan will be taxed and if you are less than 59.5 yrs you will be hit with 10% tax penalty ( $5.000.00). That's all.
I got layoff from my work 2 months ago after 20 years of my employment with this company in the U.S. My 401k is still with the company and I want to move it to Roth IRA but can't I was told by an accountant who manage my 401k that since I have an outstanding balance against my 401k, it would have to be deduct from it and I will be panelized and pay tax on what ever the amount that was deducted even while I was still working some of the amount on my paycheck have been garnished to pay toward the outstanding balance with interest.
is this right and if you have any good advice for me please don't hesitate to post it for me, thank you .
It sounds to me like you’ve an outstanding loan amount against your 401K, which what she told you is correct, in the sense you sort of took a loan from yourself while you were working there and had been paying it back through the garnishment. But since you want to withdraw the whole amount out and move it elsewhere, then you’ve to pay back the outstanding loan amount, also pay the 10% penalty if you’re under 59.5 years of age, and probably get hit an addition of almost 20% tax.
What I don’t understand is that why would you want to transfer to a Roth IRA, surely you don’t plan to withdraw all your money, then pay tax and penalty on it, then put it in the Roth IRA because that’s what a Roth IRA is, it’s money put in after you’ve already been taxed. The idea is that the withdrawals are generally tax-free when you’ve reached a retirement age, unlike a traditional 401K or IRA where you would pay tax when you withdraw.
In your case, you can leave it in the current plan, or transfer to a traditional IRA, but not a Roth IRA.
I got layoff from my work 2 months ago after 20 years of my employment with this company in the U.S. My 401k is still with the company and I want to move it to Roth IRA but can't I was told by an accountant who manage my 401k that since I have an outstanding balance against my 401k, it would have to be deduct from it and I will be panelized and pay tax on what ever the amount that was deducted even while I was still working some of the amount on my paycheck have been garnished to pay toward the outstanding balance with interest.
is this right and if you have any good advice for me please don't hesitate to post it for me, thank you .
It sounds to me like you’ve an outstanding loan amount against your 401K, which what she told you is correct, in the sense you sort of took a loan from yourself while you were working there and had been paying it back through the garnishment. But since you want to withdraw the whole amount out and move it elsewhere, then you’ve to pay back the outstanding loan amount, also pay the 10% penalty if you’re under 59.5 years of age, and probably get hit an addition of almost 20% tax.
What I don’t understand is that why would you want to transfer to a Roth IRA, surely you don’t plan to withdraw all your money, then pay tax and penalty on it, then put it in the Roth IRA because that’s what a Roth IRA is, it’s money put in after you’ve already been taxed. The idea is that the withdrawals are generally tax-free when you’ve reached a retirement age, unlike a traditional 401K or IRA where you would pay tax when you withdraw.
In your case, you can leave it in the current plan, or transfer to a traditional IRA, but not a Roth IRA.
Thank you everyon and for Gina, can you please explane what is the different btw a traditional IRA and a Roth IRA? and the reason I want to transfer my money to my current account is because the company is going out fo bussness/close . Thank you again
I got layoff from my work 2 months ago after 20 years of my employment with this company in the U.S. My 401k is still with the company and I want to move it to Roth IRA but can't I was told by an accountant who manage my 401k that since I have an outstanding balance against my 401k, it would have to be deduct from it and I will be panelized and pay tax on what ever the amount that was deducted even while I was still working some of the amount on my paycheck have been garnished to pay toward the outstanding balance with interest.
is this right and if you have any good advice for me please don't hesitate to post it for me, thank you .
It sounds to me like you’ve an outstanding loan amount against your 401K, which what she told you is correct, in the sense you sort of took a loan from yourself while you were working there and had been paying it back through the garnishment. But since you want to withdraw the whole amount out and move it elsewhere, then you’ve to pay back the outstanding loan amount, also pay the 10% penalty if you’re under 59.5 years of age, and probably get hit an addition of almost 20% tax.
What I don’t understand is that why would you want to transfer to a Roth IRA, surely you don’t plan to withdraw all your money, then pay tax and penalty on it, then put it in the Roth IRA because that’s what a Roth IRA is, it’s money put in after you’ve already been taxed. The idea is that the withdrawals are generally tax-free when you’ve reached a retirement age, unlike a traditional 401K or IRA where you would pay tax when you withdraw.
In your case, you can leave it in the current plan, or transfer to a traditional IRA, but not a Roth IRA.
Thank you everyon and for Gina, can you please explane what is the different btw a traditional IRA and a Roth IRA? and the reason I want to transfer my money to my current account is because the company is going out fo bussness/close . Thank you again
If you don't need to use the money you have in the IRA account and your company went out of business, you can roll over your IRA account to another company or bank and your money will be there in the new company until you are eble to withdraw it and you don't have to pay tax while it remains in the IRA account. That means you just roll over it to the new company.
If you don't need to use the money you have in the IRA account and your company went out of business, you can roll over your IRA account to another company or bank and your money will be there in the new company until you are eble to withdraw it and you don't have to pay tax while it remains in the IRA account. That means you just roll over it to the new company.
Since the company will be closed is it safe to have an outstanding balance deduct from my 401k before I roll it over to the bank and in what kind of account to avoid from taxation and penalty?
If you don't need to use the money you have in the IRA account and your company went out of business, you can roll over your IRA account to another company or bank and your money will be there in the new company until you are eble to withdraw it and you don't have to pay tax while it remains in the IRA account. That means you just roll over it to the new company.
Since the company will be closed is it safe to have an outstanding balance deduct from my 401k before I roll it over to the bank and in what kind of account to avoid from taxation and penalty?
You can rollover your 401k into a traditional IRA Account but, not Roth IRA in 60 days (period) to avoid taxation.
I got layoff from my work 2 months ago after 20 years of my employment with this company in the U.S. My 401k is still with the company and I want to move it to Roth IRA but can't I was told by an accountant who manage my 401k that since I have an outstanding balance against my 401k, it would have to be deduct from it and I will be panelized and pay tax on what ever the amount that was deducted even while I was still working some of the amount on my paycheck have been garnished to pay toward the outstanding balance with interest.
is this right and if you have any good advice for me please don't hesitate to post it for me, thank you .
401k is your retirement account established while you are employed with the Company that you work for. You can select how many percent you want the Company deduct from your paycheck from 5%, 10% or 15%and the Company will match/contribute the dollars for you depends on the year that you have been working for the Company.
If you leave the Company in case you've got laidoff. You can rollover your 401k to a Regular Retirement Account (IRA) but, not Roth IRA in 60 days.
Yes, if you loan money from your 401K plan. you will have to pay the balance and will be penelized plus your yearly income tax. Due to the amount that you have been contributed to your 401k was pre-tax.
I suggest you review your 401k statement. what was the amount at the begining and wagt was the interest rate. How much is the amount has been decucted from your paycheck. You will know how much you have paid back and how much more you have to payoff the balance.
I got layoff from my work 2 months ago after 20 years of my employment with this company in the U.S. My 401k is still with the company and I want to move it to Roth IRA but can't I was told by an accountant who manage my 401k that since I have an outstanding balance against my 401k, it would have to be deduct from it and I will be panelized and pay tax on what ever the amount that was deducted even while I was still working some of the amount on my paycheck have been garnished to pay toward the outstanding balance with interest.
is this right and if you have any good advice for me please don't hesitate to post it for me, thank you .
I'll give you very easy Answer,Ok. First, let'me ask you ? Do you have cash available? if you do! just payoff the amount that you own, to prevent uncle sam nail you 10% penalty.Second, one you pay it off. now free to take your money anywhere you want it to. to new employment, or just leave it at the same place and start a new account at new employment. easy right!! because i did it myself a few year ago.
I was laid off for almost a year, no luck on finding new job yet , I'm a single mom with 5 and 7 yr old and don't have enough money to pay for property tax can I take atleast $6000. out from my IRA account and will I get a penalty and how much will the government tax me for? thank you very much.
The traditional IRA is an individual retirement account that you arrange with your bank, very much like a saving plan but it’s set up for retirement, very little to no risk, and you’re allowed to put in $5000 per year for 2008 and 2009, and $6000 if you’re over 50 (they call this catching up amount), it is tax deductible the year that you put in or before April 15th of tax filing date the following year. But in your case, since it’s a roll over, there is no set amount, you can roll the whole amount in there. A Roth IRA is money put in after you already pay tax, which means that it doesn’t give you a tax break when you put in, but it’s very attractive to many because the money that grows in your Roth IRA is not taxable when you withdraw at retirement.
But for you to convert you 401K to a Roth IRA, you have to pay the tax (I’m not sure about the 10% penalty since you’re not spending the money), and the money that grows on your Roth account is not taxable to you when you withdraw at your retirement age.
If I were in your shoes, I would roll it over to a traditional IRA, then later into your new 401K if you wish, or just leave it at the IRA account.
I was laid off for almost a year, no luck on finding new job yet , I'm a single mom with 5 and 7 yr old and don't have enough money to pay for property tax can I take atleast $6000. out from my IRA account and will I get a penalty and how much will the government tax me for? thank you very much.
I BELIEVE YOU ARE UNDER 59 1/2. YOU CAN TAKE MONEY OUT FROM YOUR IRA ACCOUNT. IT IS TAXABLE AND YOU WILL BE PENALIZED. ROUGHTLY $6,000.00 X 30% = $1,800.00
IF YOU HAVE NO JOB AS OF NOW. MY SUGGESTION, IF YOU TAKE $6000.00 PLEASE HAVE TAX 20% WITHHELD AT LEAST. BY THE END OF THE YEAR YOU SHOULD BE RECEIVED 1099R AND JUST GIVE THE PAPER TO YOUR INCOME FILING PERSON. THEY KNOW HOW TO HANDLING IT. HOPE YOU CAN FIND A NEW JOB SOON. WE ARE ALL IN THE SAME SITUATION.
I got layoff from my work 2 months ago after 20 years of my employment with this company in the U.S. My 401k is still with the company and I want to move it to Roth IRA but can't I was told by an accountant who manage my 401k that since I have an outstanding balance against my 401k, it would have to be deduct from it and I will be panelized and pay tax on what ever the amount that was deducted even while I was still working some of the amount on my paycheck have been garnished to pay toward the outstanding balance with interest.
is this right and if you have any good advice for me please don't hesitate to post it for me, thank you .
My best advice is take your last statement and walk into a bank or a credit union if available to you and talk to Financial specialist this is free of charge. "been there, done that"
If, you look at your last statement which you must have received it about last week or so ago. the return looks promissing I mean it's actaully on a positive margins.
depending on how much you have to pay back just remember even though you are paying interest it's mostly less than any financial institutes. hope this help.
Ps, you been working for 20yrs? you are old! just kidding.
I got layoff from my work 2 months ago after 20 years of my employment with this company in the U.S. My 401k is still with the company and I want to move it to Roth IRA but can't I was told by an accountant who manage my 401k that since I have an outstanding balance against my 401k, it would have to be deduct from it and I will be panelized and pay tax on what ever the amount that was deducted even while I was still working some of the amount on my paycheck have been garnished to pay toward the outstanding balance with interest.
is this right and if you have any good advice for me please don't hesitate to post it for me, thank you .
My best advice is take your last statement and walk into a bank or a credit union if available to you and talk to Financial specialist this is free of charge. "been there, done that"
If, you look at your last statement which you must have received it about last week or so ago. the return looks promissing I mean it's actaully on a positive margins.
depending on how much you have to pay back just remember even though you are paying interest it's mostly less than any financial institutes. hope this help.
Ps, you been working for 20yrs? you are old! just kidding.
Thanks for calling me old but not old enough to retire have a nice evening Darling.
I got layoff from my work 2 months ago after 20 years of my employment with this company in the U.S. My 401k is still with the company and I want to move it to Roth IRA but can't I was told by an accountant who manage my 401k that since I have an outstanding balance against my 401k, it would have to be deduct from it and I will be panelized and pay tax on what ever the amount that was deducted even while I was still working some of the amount on my paycheck have been garnished to pay toward the outstanding balance with interest.
is this right and if you have any good advice for me please don't hesitate to post it for me, thank you .
My best advice is take your last statement and walk into a bank or a credit union if available to you and talk to Financial specialist this is free of charge. "been there, done that"
If, you look at your last statement which you must have received it about last week or so ago. the return looks promissing I mean it's actaully on a positive margins.
depending on how much you have to pay back just remember even though you are paying interest it's mostly less than any financial institutes. hope this help.
Ps, you been working for 20yrs? you are old! just kidding.
Thanks for calling me old but not old enough to retire have a nice evening Darling.
No, not enough but only 20plus yrs. hehehe but seriously I am sorry about losing your job my brother just lose his and that make me cry. he has college kid to support but, i know if he is anything like me this would make him stronger and always come out on top and i hope the same for you.
