If you get money from your IRA, how long does it take?

[leigha]

I know there are penalties involved but we need the money for the lawyer if we're really going to do this. How long does it take to actually get the money and when do the penalties hit?

[ccsjoe]

How long it takes depends on the type of IRA account and the financial institution. If it's an IRA money market, next business day. If it's mutual funds, usually T+3, meaning date of trade plus three business days to settle. Of course plus whatever time in the mail given the delivery option you've selected.

As far as penalties, you're gonna get hit with a 20% witholding upfront (so if you requested 10K gross you will get 8K) plus an extra 10% penalty come tax time, on top of whatever state penalty you may incur. Should be around 40% penalty when all is said and done come tax time. All in all pretty expensive financing. I would suggest looking for an alternative if you can.

[wnguyen]

leigha

When I liquidated my IRA account 6 months ago, it took me a few days to get the funds. About the penalties, I decided to have them withheld 20% and gave me the rest. It's up to you to pay the penalties now or later. At least that was for my case.

[leigha]

I would love to do it another way but I don't see another way. This is all I think about! How can you think about one subject so much and not come up with better answers?! At least we're healthy. It seems so many aren't these days. I know I have to focus on the positive but it is so hard sometimes. We need to know so much, so quick and so much depends on it. Seriously, does nerve medication help? What about sleeping pills?

[discouraged]

Do you ahve to take out all of it to pay the attorney? Can you take out just what you need and then make payments back to them? Or take it out and put what you don't need into a ROTH? I wish now that I had my 401K. I stupidly took it out to keep surviving rather than go into bankruptcy. What a waste of money!

[ccsjoe]

discouraged, unfortunately she's talking about an IRA, not a 401K. If it were a 401K or a 457 or 403B, then yes, she could be looking at a loan instead.

[discouraged]

Sorry. I just get so mad at myself when I realized I'd basically thrown my money away. But, if I had it now I certainly would use it for the lawyer or just keep it for that rainy day we all are facing.

[ccsjoe]

Wasn't meant as criticism at all, no need to apologize. Just wanted to clarify terminology so OP wouldn't get potentially confused.

[discouraged]

Thank you, Joe. I'm still a newbie and learning so much from everyone. Usually keep my 'fingers' quiet until I learn what is going on and what everyone is saying. Thanks for the clarification.