Personal Development for Smart People Forums - View Single Post - 401k money question...to take it out or not to take it out

Rockchick26 · 10-23-2009, 07:58 AM

Here is my situation: I have been unemployed for 8 months with no job leads in sight. My unemployment money runs out in 3 months. I am living in an apartment where the rent is slowly sucking up all my money. Moving home is the least desired of my options, in fact it isn't even on my options list. Here is one option which involves my 401k money. I have about $4500 in there right now. I am fully aware that if I were to take this money out now (I'm 37) that I would be charged a penalty as well as having to pay taxes on this money. Here's the BUT...if i kept this money in there until I retire, it isn't going to do much good for me then. In other words, the couple thousand bucks is much more needed now than when I am retired. At least then I'll have social security and I'd have somewhere to live (my parents will leave me and my brother with half their estates; they both have their own houses). Right now, I got nothing.

I realize that I would only get about $3000 of that money after the taxes and fees, but that $3000 would allow me to buy a decent RV or camper that I could live in when I can't afford to stay here anymore (which is one of my goals, to drive around the country in something I can live in). OR if I decide not to do that, I could use the money to keep me living here for a few more months longer in hopes that I can get a job in that time.

I just feel that the money would be much more useful to me now than it would be then. Any thoughts on what I should do?

10-23-2009, 07:58 AM	#1 (permalink)
Rockchick26 Banned Join Date: Jan 2008 Location: Minnesota Posts: 3,037	401k money question...to take it out or not to take it out Here is my situation: I have been unemployed for 8 months with no job leads in sight. My unemployment money runs out in 3 months. I am living in an apartment where the rent is slowly sucking up all my money. Moving home is the least desired of my options, in fact it isn't even on my options list. Here is one option which involves my 401k money. I have about $4500 in there right now. I am fully aware that if I were to take this money out now (I'm 37) that I would be charged a penalty as well as having to pay taxes on this money. Here's the BUT...if i kept this money in there until I retire, it isn't going to do much good for me then. In other words, the couple thousand bucks is much more needed now than when I am retired. At least then I'll have social security and I'd have somewhere to live (my parents will leave me and my brother with half their estates; they both have their own houses). Right now, I got nothing. I realize that I would only get about $3000 of that money after the taxes and fees, but that $3000 would allow me to buy a decent RV or camper that I could live in when I can't afford to stay here anymore (which is one of my goals, to drive around the country in something I can live in). OR if I decide not to do that, I could use the money to keep me living here for a few more months longer in hopes that I can get a job in that time. I just feel that the money would be much more useful to me now than it would be then. Any thoughts on what I should do?