Question regardng 401K funds while in a Chapter 13 BK ?? > > >

[psa10]

Another question for the forum here, I really do appreciate everyone's input here! Question is this.....

#1) If I decide to relocated to another state would I be able to remove funds from my personal retirement account to help relocate with the expenses? Moving costs, down payment for a place to live. Also if I decided to attend school there I would want to pay for it using some of my retirement fund. How much of a problem would it be to take funds out of one's retirement account?

The account has a balance of around $145,000 at present time, less taxes of course around 40% ++. My cases has of course already been filed and approved on a 5 year plan. I just need opinions in regards to my retirement funds here.

Thanks!!!

[LadyInTheRed]

Do not withdraw your retirement funds! They are for retirement, not for relocating or education. Not only will you have to pay taxes, you will also have to pay a 10% penalty if you are not of retirement age. If you want to relocate, save the money you need to pay the expenses. Go to school where you can get grants or afford to pay tuition.

[niko]

I totally I agree! Do not make a mistake..

Do not withdraw your retirement funds! They are for retirement, not for relocating or education. Not only will you have to pay taxes, you will also have to pay a 10% penalty if you are not of retirement age. If you want to relocate, save the money you need to pay the expenses. Go to school where you can get grants or afford to pay tuition.

[AngelinaCat]

Do not withdraw your retirement funds! They are for retirement, not for relocating or education. Not only will you have to pay taxes, you will also have to pay a 10% penalty if you are not of retirement age. If you want to relocate, save the money you need to pay the expenses. Go to school where you can get grants or afford to pay tuition.

Thank You Lady! You saved me from getting out my baseball bat!

PSA, I think you have your answer...

[psa10]

Thanks for the reply.... I really wanted to try and use some of the funds to help with possible re-location, however don't want to lose my 401K to the trustee either. I guess I will have to wait another 58 months if I decide to tap the funds once the case is all over........

[AngelinaCat]

Thanks for the reply.... I really wanted to try and use some of the funds to help with possible re-location, however don't want to lose my 401K to the trustee either. I guess I will have to wait another 58 months if I decide to tap the funds once the case is all over........

No. You have to wait until you are of RETIREMENT age to begin to think about tapping those funds. For all intents and purposes, this 401k does NOT exist in your realm (mindset)

Or it should not. You are robbing from your Future. And NO, there is no way you will be able to make it up.

'Hub and I have been there and done that, and are regretting it EVERY single pay period.

Be smarter than we were!!! ::

[TXskyblue]

You said that retirement funds are not for relocation or education. I totally agree about them not being for relocation, but education might be a valid reason.

I had to hold off going to college for a 2nd degree for a few years because I couldn't afford it. Once I finally got the degree, I instantly (literally the same day) got a $10 per hour raise. If I had retirement funds to use, I could have gotten that $10 raise a few years earlier.

I wouldn't use retirment funds for vague "going back to college" reasons, though. Mine was very specific with a known payoff.

[zeezee]

You said that retirement funds are not for relocation or education. I totally agree about them not being for relocation, but education might be a valid reason.

I had to hold off going to college for a 2nd degree for a few years because I couldn't afford it. Once I finally got the degree, I instantly (literally the same day) got a $10 per hour raise. If I had retirement funds to use, I could have gotten that $10 raise a few years earlier.

I wouldn't use retirment funds for vague "going back to college" reasons, though. Mine was very specific with a known payoff.

That may be true, but what you can't make up is the compounding interest over time that has built up. You would have to double or even triple your contributions.