NFT: Pull Money Out Of 457/401K? - Page 2

The Rick · 05-03-2005, 01:00 PM

Here's a quick question. I think I know the answer, but I'll ask anyway.

I have a debt I want to pay off quickly. I don't feel like getting roughed up by a couple of thugs looking for their money.

Okay, I'm just kidding about the thugs part.

But honestly, I just want to be rid of some debt and I don't enough spare cash on hand to pay it off right now.

I do have more than enough to pay off the debt in a 457. Is there any way to pull some money out of a 457?

So far, the only thing I've seen about pulling money out of a 457 is that it can be done when you quit your job or in the event of an unforseen emergency. I don't feel like quitting my job and don't have any emergencies right now.

I know there would be taxes that would have to be paid and possibly a penalty, but it would still be worth it to me in the long run.

wutamess · 05-03-2005, 02:22 PM

What's the going interest rates on a 401k loan?
Say for instance is it cheaper than the 6% home lan rate or chepaer than a car loan rate?

Andoverer · 05-03-2005, 02:29 PM

Quote:

Originally Posted by coryt

Thanks for the tip, I'm gonna have to read up on Ramsey. I could use some debt clearance in a bad way too!

http://daveramsey.com/

Here's his site. Dave is extremely insightful about being smart with your money. My wife and I are in the debt elimination mode thanks to him. I only wish I had run across him sooner. Best of luck to you.

**Rain Man** · 05-03-2005, 02:38 PM

Quote:

Originally Posted by wutamess

What's the going interest rates on a 401k loan?
Say for instance is it cheaper than the 6% home lan rate or chepaer than a car loan rate?

I don't think it really matters. You pay it to yourself.

Amnorix · 05-03-2005, 02:47 PM

Avoid yanking money out of the 457/401(k) at all costs.

Basically, unless you're into a "going to lose my home" situation, you don't want to do it.

wutamess · 05-03-2005, 02:54 PM

Quote:

Originally Posted by Rain Man

I don't think it really matters. You pay it to yourself.

Actually it does.
I was reading up on the difference in the types of loans and basically it said that you don't really want to borrow from your 401k as opposed to other loans.

I'll find the link if I can...

BIG_DADDY · 05-04-2005, 12:51 AM

Quote:

Originally Posted by Amnorix

Avoid yanking money out of the 457/401(k) at all costs.

Basically, unless you're into a "going to lose my home" situation, you don't want to do it.

Good call!!

Logical · 05-04-2005, 01:04 AM

Some companies offer loans against your 401K or 457, usually the interest you pay goes back into your own account. This is much better than taking money out and would still serve your needs. There are no tax or penalties on such loans. I would check with your fund manager to see if this an option available to you.

Ultra Peanut · 05-04-2005, 01:06 AM

THIS IS NO GODDAMN CHECKING ACCOUNT

Stop trippin' fo I bust you, dawg.

Ultra Peanut · 05-04-2005, 01:07 AM

Don't try to play me, fool.

Logical · 05-04-2005, 01:08 AM

Quote:

Originally Posted by wutamess

Actually it does.
I was reading up on the difference in the types of loans and basically it said that you don't really want to borrow from your 401k as opposed to other loans.

I'll find the link if I can...

The theory on why you do not want to is that theoretically the investment will earn more than the interest you pay yourself. Great in theory, but if you need the money not very practical.

If they are telling you it is better than other loans, that sounds like somebody doing a poor analysis or they do not understand the interest gets paid back into your own account.

**ExtremeChief** · 05-04-2005, 03:01 AM

I took a loan out of my 401K. I pay it back to my account at 9%. I would think that would be better than getting a traditional loan and paying someone else the interest. I assume it varies depending upon who your 401K is with whether or not it is profitable.

**ptlyon** · 05-04-2005, 07:25 AM

Quote:

Originally Posted by wutamess

What's the going interest rates on a 401k loan?

I think it varies by your 401k "account", but I think ours is 2% over prime.

Eleazar · 05-04-2005, 07:43 AM

What would you end up getting if you tried to cash out your 401k, after taxes and everything? Like 50% of its value?

**ptlyon** · 05-04-2005, 07:44 AM

Quote:

Originally Posted by Cochise

What would you end up getting if you tried to cash out your 401k, after taxes and everything? Like 50% of its value?

That is about right - maybe even a little more.

Amnorix · 05-04-2005, 08:50 AM

Quote:

Originally Posted by Cochise

What would you end up getting if you tried to cash out your 401k, after taxes and everything? Like 50% of its value?

My understanding is that it would average something like 60%.

Of course, you're also losing tax free investment growth on that money going forward.

Basically, in terms of retirement / long range financial planning, it's about the worst thing possible. Unless you're got a truly dire emergency, don't even think about it.

My MORON brother-in-law withdrew from his 401(k) to buy my sister-in-law her engagement ring. Didn't even know about the horrendous consequences. Idiot...

05-03-2005, 01:00 PM
The Rick Veteran Join Date: Aug 2000 Location: Milwaukee, WI Casino cash: $6811320	NFT: Pull Money Out Of 457/401K? Here's a quick question. I think I know the answer, but I'll ask anyway. I have a debt I want to pay off quickly. I don't feel like getting roughed up by a couple of thugs looking for their money. Okay, I'm just kidding about the thugs part. But honestly, I just want to be rid of some debt and I don't enough spare cash on hand to pay it off right now. I do have more than enough to pay off the debt in a 457. Is there any way to pull some money out of a 457? So far, the only thing I've seen about pulling money out of a 457 is that it can be done when you quit your job or in the event of an unforseen emergency. I don't feel like quitting my job and don't have any emergencies right now. I know there would be taxes that would have to be paid and possibly a penalty, but it would still be worth it to me in the long run.
Posts: 2,442

05-03-2005, 02:22 PM	#16
wutamess MVP Join Date: Aug 2000 Location: Lee's Summit Casino cash: $4711637	What's the going interest rates on a 401k loan? Say for instance is it cheaper than the 6% home lan rate or chepaer than a car loan rate?
Posts: 8,290

05-03-2005, 02:47 PM	#19
Amnorix In BB I trust Join Date: May 2003 Location: Boston, Mass. Casino cash: $10029808	Avoid yanking money out of the 457/401(k) at all costs. Basically, unless you're into a "going to lose my home" situation, you don't want to do it.
Posts: 43,125

05-04-2005, 01:04 AM	#22
Logical Screw U if U can't take a joke Join Date: Aug 2000 Casino cash: $10004900	Some companies offer loans against your 401K or 457, usually the interest you pay goes back into your own account. This is much better than taking money out and would still serve your needs. There are no tax or penalties on such loans. I would check with your fund manager to see if this an option available to you.
Posts: 31,579

05-04-2005, 01:06 AM	#23
Ultra Peanut v^V^v^V^v^V^ Join Date: Aug 2001 Location: Holland* Casino cash: $10005177	THIS IS NO GODDAMN CHECKING ACCOUNT Stop trippin' fo I bust you, dawg. __________________
Posts: 39,518

05-04-2005, 01:07 AM	#24
Ultra Peanut v^V^v^V^v^V^ Join Date: Aug 2001 Location: Holland* Casino cash: $10005177	Don't try to play me, fool. __________________
Posts: 39,518

05-04-2005, 03:01 AM	#26
ExtremeChief Poser Join Date: Mar 2001 Location: BFE, MO Casino cash: $9991344	I took a loan out of my 401K. I pay it back to my account at 9%. I would think that would be better than getting a traditional loan and paying someone else the interest. I assume it varies depending upon who your 401K is with whether or not it is profitable. __________________ When you wish upon a falling star, your dreams can come true. Unless it's really a meteorite hurtling to the Earth which will destroy all life. Then you're pretty much hosed no matter what you wish for. Unless it's death by meteor.
Posts: 2,354

05-04-2005, 07:43 AM	#28
Eleazar Beyond the Rapids Join Date: May 2003 Location: Langley, VA Casino cash: $-370000	What would you end up getting if you tried to cash out your 401k, after taxes and everything? Like 50% of its value?
Posts: 80,659

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