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Posted by A.G. Kalman on November 11, 2006, 10:35 am
Please log in for more thread options puneet.maini@gmail.com wrote:
> Do you know what is the exact amount on which 10% penalty is
> imposed when you would withdraw money from your 401(k)
> account? Is it on the absolute amount you have in your
> 401(k) account?
>
> Some background info abt me:
> I work here in US, but plan to move/settle back overseas
> after like 3-4 years.
>
> Basically I want to know:
> Can I still make some money after the 10% penalty taking
> into consideration the money contributed by employer?
>
> Here's the calculation I have:
>
> My Contribution (1 yr) : 3917.99
> Employer Contribution (1 yr) : 1958.99
>
> Total (1 yr) : 5876.99
> Approx 5 % investment gain : 6170.84
>
> Now, if I would like to withdraw this money what all
> expenses would I have to be ready for
>
> So, would the 10% penalty be on 6170.84?
> On what amount would I have to pay taxes - my + employer
> contribution?
The 10% early withdrawal penalty is applied to the amount of
the taxable distribution not the balance in the account. If
your account consists of employer matching contributions,
your own pre-tax contributions plus any earnings, then any
distribution is 100% taxable and subject to the 10% penalty
unless you attained age 59 1/2 or meet one of the
exceptions.
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