Taking out money from a retirement account? | TigerDroppings.com

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RandySavage
Member since May 2012
7772 posts

Taking out money from a retirement account?


My wife worked at a doctor's office for a year or so after college waiting to find a real job and was putting money into some sort of John Hancock retirement account. There is like $900 in it right now but what are we are going to do with a $900 retirement account that no more money is going to be put into?

All of that is to say if she takes the money out how much can expect to lose from taxes, early withdrawal penalties etc....?







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Volvagia
LSU Fan
Baton Rouge
Member since Mar 2006
40533 posts
 Online 

re: Taking out money from a retirement account?


What kind is it, assuming traditional 401k?

I would just roll it over into a IRA. Or possibly a Roth IRA depending on where your taxes are at.






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Broke
LSU Fan
AKA Buttercup
Member since Sep 2006
56017 posts

re: Taking out money from a retirement account?


Whatever your joint tax rate is + 10% penalty





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dewster
Maryland Fan
Tennessee
Member since Aug 2006
9047 posts

re: Taking out money from a retirement account?


quote:

Whatever your joint tax rate is + 10% penalty


Is that the same for a roth?






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Broke
LSU Fan
AKA Buttercup
Member since Sep 2006
56017 posts

re: Taking out money from a retirement account?


No because Roth has after tax money in it.





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Volvagia
LSU Fan
Baton Rouge
Member since Mar 2006
40533 posts
 Online 

re: Taking out money from a retirement account?


Actually it is only tax free if it is a qualified distribution.

You won't have to pay taxes on the money that you put in it (and in fact you can take whatever money you put in, out, at any time no questions asked).

But you'll have to pay taxes on earnings.






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foshizzle
LSU Fan
Washington DC metro
Member since Mar 2008
29858 posts

re: Taking out money from a retirement account?


For a Roth, you can take out at any time without penalty up to the amount you have put in. Anything above that is treated much like a traditional IRA, i.e. interest and penalties do apply.

Example: Les Miles and John Chavis each contribute $1000 to their Roth accounts. At the end of the year, Miles' account is worth $1100 and Chavis' is worth $900.

Miles can take out $1000 without penalty. Chavis can take out the full $900, again without penalty. If Miles takes out $1100, he will owe tax and penalties on the last $100.






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CoolHand
USA Fan
Member since Dec 2011
1482 posts

re: Taking out money from a retirement account?


quote:

Les Miles and John Chavis



Neither of these guys has been eligible for a while.






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LSUtoOmaha
LSU Fan
Nashville
Member since Apr 2004
21117 posts

re: Taking out money from a retirement account?


Can Chavis declare a $100 loss for that year?





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