401K rollover
Terry,
I left my job and took my 401k and moved $8000 to a new 401k and took $9000 for myself. It said that $2500 was going to be either paid or taken out. How do I handle this when I do my taxes?
Thank you,
Janet
Terry Says
Well, I hope you’re under the age of 50-1/2 or else you will pay a 10% penalty on that withdrawal! That’s in addition to ordinary income taxes on the money! The former company will likely withhold those amounts.
If you made the transfer within 60 days ago, please put the money back into your new 40l(k) — or an IRA Rollover. Read this: https://www.terrysavage.com/rollover-now/
That would avoid both the penalty and taxes! Talk to the HR department at your previous company and let them know if you do create an IRA rollover. Then they won’t have to do the withholding.
