10% penalty for early withdrawal of 401K? SS?

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Presbyter

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I will be laid off after 25 years at my company. I'm server-Profound hearing loss with strong hearing aids. I will need to withdraw all my 401K at this time. I understand I will have to pay taxes on the withdrawal as well as a 10% penalty fee. I've heard that the social security offices might be able to waive the 10% penalty for early withdrawal of 401K. I'm not familiar with the SS process and I don't know the first step to ask the SS to waive the penalty. How do I go about saving 10% and what are the chances that I might qualify for this kind of waiver? Any suggestions would be greatly appreciated as my time will be running out.
 
All i know is that SSA is not involved with any kind of 401k. that is completely separately between SSA and any kind of 401k. maybe you are talking about IRS?? I think it is the best thing is to check with your 401k in your dept first and then it will lead you to ask IRS a few quesitons about it. If you have been paying SS taxes, then you can check with your local SSA to check about your other benefits that is not 401k.

good luck.
 
Moving to the right forum....

401k's and ADA sure does mix well like oil and water...NOT!
 
there are no money saving ideas with the 401k if you draw early. either you wait until you are old enough to retire as per the SSA or pay huge penelty fees.
 
There is no free. They work hard to make sure your money is on secure that you don't lose money.
 
I don't think there is a way around this fee. However, I am not an expert, so I may be wrong. I did a Google search, and found a very good site with 401K withdrawal rules. I couldn't go into a thorough investigation of the site, but I think reading up in there will give you the answers you need.
 
Compelling story

I am running for Congress and I would like to use your story to illustrate the pain felt by millions of people who have been forced to pay 10% penalty for spending their 401k after losing their jobs. Please contact me at bryonss@yahoo.com. Thanks, Bryon Severns, Arlington, Libertarian Party of Texas.
 
bryonss said:
I am running for Congress and I would like to use your story to illustrate the pain felt by millions of people who have been forced to pay 10% penalty for spending their 401k after losing their jobs. Please contact me at bryonss@yahoo.com. Thanks, Bryon Severns, Arlington, Libertarian Party of Texas.
Click to expand...

You Domestic Dissent! :mad2:
 
I do not think it is good idea to depend on 401K for lay off purpose. It should stick with retirment or fully disabled purpose.

What I think we need is a separate fund where it won't depend on stock market to stash money away for "lay off" Because usually when economy goes south, so is the stock market, 401K plan will lose its value. That layoff fund should be tax free until withdrawn for unemployment, then pay tax at that time.

Thats my IMHO
 
Presbyter said:
I will be laid off after 25 years at my company. I'm server-Profound hearing loss with strong hearing aids. I will need to withdraw all my 401K at this time. I understand I will have to pay taxes on the withdrawal as well as a 10% penalty fee. I've heard that the social security offices might be able to waive the 10% penalty for early withdrawal of 401K. I'm not familiar with the SS process and I don't know the first step to ask the SS to waive the penalty. How do I go about saving 10% and what are the chances that I might qualify for this kind of waiver? Any suggestions would be greatly appreciated as my time will be running out.
Click to expand...

SSA has nothing to do with your IRS penalty of early withdrawal on your 401k. The ONLY way to avoid issues is to take a loan out and pay it back to your 401 plus interest within 30 or something days (cant remember). This is a very BAD idea. DONT DO IT! DO NOT CALL your 401k investor. they will assume you want the money and mail you a check weather you want it or not. IF you want to aviod the 10% penalty if you do get the check- you have to roll it over to roth or another 401k plan within 30 days of the day you called them, not when you get it so you may have already lost nearly a week. 401k investors are ruthless. the IRS is even worse. If for any reason you get the check and they didnt take out the 10% then be prepared to take it up the ass at tax time. You will pay it no matter what! If you are going to be laid off, don't you get a layoff package ? you should be. Also file for unemployment the day you walk out of your work. This will ensure you get money coming in until you find another job or while the SS process is underway. Once the SS kicks in you may or may not have a job and you will be halfway or more through using your unemployment benefits.
 
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