Surrounded by economic distress, most of us are doing the best we can to save money. We do things like riding the bus, walking or taking a bike to work. Maybe we take quicker showers or wash Ziploc baggies. Some of us try to turn off the lights and save electricity by unplugging those appliances that drain energy. There are a number of things we can do to save money, but sometimes despite our best efforts we find ourselves in a financial rut. With mortgages to pay and creditors constantly harassing you, it is almost discouraging and disheartening to try and pay them off, especially with the large interest rates. Where can you turn for help to get just the extra bit of cash you need to get a break from all your financial troubles? Try looking into the 401k withdrawal rules. It may be the right way for you to get money you need fast.

One of the 401k withdrawal rules is that you cannot access your retirement money until you turn the age of fifty-nine and half years old. At this age you are legally ready to retire and therefore the money in your 401k is available to withdraw and use. Although if you try to get the money before that precise age, you will find that the government will penalize you. Now you are wondering how this can be worth your time. Well, the penalty is only a ten percent additional tax. To understand this you must realize that when you put money into your 401k plan that is not taxed. Upon removal of the money, even when you have reached the retirement age, you will be taxed like it is a normal income. But when you pull it out early due to the 401k withdrawal rules, you must pay another ten percent tax on the withdrawn money. For example let’s say that you are in the twenty-eighth percentile for taxes. You pull out ten thousand dollars from your 401k retirement fund. You would have to pay two thousand and eight hundred dollars in taxes. Then to appease the penalty of early withdraw, you would pay another thousand dollars. After all this you would be left with six thousand and three hundred dollars. After calculating your taxes and penalty, it may be worth it to you and your family to pull money out of your 401k so that you can keep your home. Or it may not.

The 401k withdrawal rules have exceptions to the penalty, but they are not something that everyone can obtain. After calculating your losses and gains, maybe all the ways you are trying to save money is enough and you decide to leave your 401k retirement plan alone. To others it may be more beneficial to retrieve the money and spend it buying your home. What ever you decide in the end, remember to learn about the 401k withdrawal rules, so that you can know all your options for making the right choice.