I’m Dying. How do I withdraw money from My 401K?
Hi Terry, thank you for any help you can offer. I’m 62 I’ll be 63 on February 3rd 2021. I have metastatic breast cancer and probably hopefully have two more years. I will probably be divorced by December 31st 2021. I have one daughter 25. I want her to get all the money I have left and not have to pay any taxes. I have in my name about $25,000 in credit card debt that is supposed to be split in the divorce. I rent. I only have about $160,000 in my job 401K, $35,000 in an IRA. I’m going to apply for a three year medical leave where I have been paying for Long Term Disability (LTD) w here I can get 60% of my salary which should be after taxes about $2000. monthly. How should I withdraw my money? When should I withdraw ?
Terry Says
Oh, I am so sorry to hear about your situation. But I have some important financial advice for you: DON’T WITHDRAW ANY MONEY FROM YOUR 401(k) or IRA — unless you need it for living expenses!
BUT DO contact the plan “custodian” for each of those accounts and name your daughter as BENEFICIARY (not your soon-to-be ex-husband!).
As beneficiary of each account, your daughter will get the money tax-free, and she can even keep the account growing for her own retirement.
It is a simple form to sign and return, so don’t delay.
And, don’t give up on your future. I have many friends who have been fighting — and winning — this battle for years.
