401K assistance, please

Hey, everyone...

To piggyback on the "what-would-you-do-if-you-got-out-of-journalism?" thread on the journalism board, I, have been pondering this question for some time now.

Here's my deal (and please excuse the ignorance): I'm 43, with about 45K in my 401K (15 percent every week). Circumstances at my POS CNHI shop may lead me to just run up the white flag and exit. If I were to do that, could I cash in my 401K to live on until I find something else? If so, how much should I put aside for the tax bitch slap I will get next April for doing so?

I realize this is a drastic measure, but I figure I'm still at an age where I can restart a 401K at my next place (unrealistic?).

Any ideas, thoughts would be much appreciated.

Thanks.

 

Don't cash it out.
The first page of experts in a "cash out 401k" Google search agrees, and the list continues:

http://www.401khelpcenter.com/mpower/feature_121902.html
http://forums.kiplinger.com/showthread.php?t=2536
http://www.howtoadvice.com/Preview/Yayfvqb/
http://www.oprah.com/tows/pastshows/tows_past_20011115_h.jhtml (sorry, it came up in the search)
http://www.freemoneyfinance.com/2005/09/need_cash_dont_.html
http://en.allexperts.com/q/Tax-Law-Questions-932/401K-cash.htm
http://money.cnn.com/magazines/moneymag/money101/lesson23/
http://marketplacemoney.publicradio.org/display/web/2005/07/15/money_matters_borrowing_from_your_401k/

 

I've cashed mine out when I had to move for a job and wanted to get a fresh start on bills and the like. I just had them hold 25 percent back.

 

absolute last resort

don't take money out of your 401(k) unless you'll go hungry without that money

and if you're not in your company's plan, get in now

and take out the max allowed

you will be glad you did

 

I called the fund people: Max I'm allowed to contribute? 80 percent!

Don't think I can quite swing that.

 

Let me echo KJ. Don't touch it, Colton, unless it's the difference between you sleeping on the street or not. Aside from the bitch-slapping you'll take tax-wise, there's the not-insignificant fact that you're 43 and don't have the time to recoup like some of the young'ins here.

Five years ago, I lost my job and cashed in an IRA I spent the better part of a decade amassing. I staved it off as long as I could; it was a last resort. And I'm still pissed that I had to do it, because there's 17 grand I won't ever get back.

The experts are right. Do everything you can not to pull the trigger.

 

But you are away they will match part of the first five percent of your salary, right? Put at least that much in. If they are going to just give you money (tax free, even), then take it.

 

Not tax free. Just tax deferred.

 

I knew I would get nailed on that right after I posted it. You're correct, of course.

 

Much great advice, thank you. IJAG, wish I were your age -- it would be a much better option for me.

ADifferentOkie: I agree --I've been putting 15 percent in since the start.

 

No, no, no, no, no. Do NOT under ANY circumstances take money out of your 401k unless ALL other sources of income are gone and you fully understand ALL the ramifications on taxes and penalties.

 

What I'm not understanding is how it seems that you won't be able to work some type of gig between newspaper jobs.

I'd work double shifts at Burger King before I cashed in a 401K.