Message Font: Serif | Sans-Serif
 
No. of Recommendations: 0
Fools,

I have a 401(k) from a former employer that I have just let sit for about 4 years. My contributions were after tax, but of course the employer match and all earnings are subject to tax. I want to roll this 401(k) into an IRA. I was told by the 401(k) company that I would receive a check for the after tax contributions I made while employed (only about $650). The rest of the money (the amount subject to tax) will be rolled into my IRA. Now the kicker, I was told that I don't have to pay any tax on this distribution (since I did already) but I also don't have to pay the normal 10% early withdrawl penalty. I thought that ANY amount not rolled over would be subject to this penalty.

Any insight?

Thanks in advance!
Print the post  

Announcements

What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.