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Subject:  Re: Poll: 401K Roll it? Take it? Date:  4/3/2007  5:59 PM
Author:  aj485 Number:  56559 of 78168

The qualifying event has occured. You can take your money out of your 401K early. You are almost 50 years old. It's around $50,000.00.

After the tax & penalty hit, you beleive you will have around $40,000.00 to pay off the debt, and invest with.

You would be incorrect in your belief. Since you are still working, the $50k will be added to your income for the year you take it, pushing your marginal tax bracket for most, if not all of the distribution to at least the 25% federal bracket, if not higher. You will also pay a 10% penalty.

That means that after tax and penalty, you will end up with, at most, $32.5k. And that's before any state taxes or p