I'm looking for some opinions. I can cash out my 401K and get about $5200 this would catch me up on all the house payments I am behind on. I know I will have to pay a penalty and income tax on it but I always get a refund on taxes so I don't think that is much of a concern. I can also take a loan out on it for $2000 this would catch me up on most of the payments and avoid penalties and income tax but this also generates another monthly payment which I don't want or need right now. I really think I should take the $5200 and secure the place I live and hope work picks up or I start my new job sooner than expected (very unlikely). Any input is appreciated.

They say, they being most financial experts, that you should never touch any of your retirement accounts. Do you have any friends or family that can help you out? Either way hang in there.

I'm looking for some opinions. I can cash out my 401K and get about $5200 this would catch me up on all the house payments I am behind on. I know I will have to pay a penalty and income tax on it but I always get a refund on taxes so I don't think that is much of a concern. I can also take a loan out on it for $2000 this would catch me up on most of the payments and avoid penalties and income tax but this also generates another monthly payment which I don't want or need right now. I really think I should take the $5200 and secure the place I live and hope work picks up or I start my new job sooner than expected (very unlikely). Any input is appreciated.

Most 401k's will allow you to take what is called a Hardship Withdrawal. Call your plan administrator for details. The IRS strictly regulats this, and it is only allowed if you can prove your house is on the verge of foreclosure(letters having the word foreclosure in them), medical related bills, etc etc. They can give you more details on this. And this withdrawal is not a loan from your 401k. You just withdraw it.

Sell your bike.

It comes down to what you want more:

1) Pay taxes and penalty on your 401(k) money, which is essentially money out of your pocket

2) Personal loan which adds another payment to your monthly expenses

3) Selling your bike and going without a toy for the rest of the year

This shouldn't even be a question.

True, if it was house vs. bike... bye bye bike.

I hate to say it...as much as I don't think I could go without My bike... I'd ell it if it meant me having a roof over my head. :(

I cashed out on my 401k many years ago when I got laid off and was piss broke. It wasn't alot of money, but those fucks too 40% of it in taxes and penalties. I had no other choice, it was cash out or don't eat. Don't touch it unless you absolutely HAVE to.

Dave Ramsey says "NO". But me I dont care, you do what you have to, but remeber that the 401k contributions are pretax. when or if you pay it back a loan on it you pay post tax. Lose, lose situation. Best of luck to u.

Sold the bike last November.
Hardship withdrawl sounds like a good idea.
What is not to question?
I normally would not consider touching the retirement fund but it is olny $5200 and if things ever pick up again I can put back in at a higher %.
My company give a great loan plan the intrest goes back into the funds.

Do not misquote Dave Ramsey, or suffer the wrath of Dorkfish!

Actually, Ramsey cites 2 cases where it's acceptable to cash out a 401k: to avoid a bankruptcy, or to avoid foreclosure. It looks like we're trying to avoid foreclosure.

And OP: fix your withholding so you do not get a tax refund. You're having too much taken out at exactly the time you need every bit you can get. And don't tell me how much you like getting a tax refund or I'll break out the wet noodle and intellectually flog you with it. And if you haven't yet, stop contributing the the 401k until you get yourself squared away. Meanwhile, you need a bunch of temporary employment: Domino's, cut some grass, night shift at 7-11, throw some boxes at UPS, dig a ditch whatever. You need income right now.

I would talk to your tax adviser (H&R block) or whoever you files your taxes on cashing out on your 401k. This way, you will not be stuck with unknown amount when it comes during tax season.

If you file your own tax, you should contact your city to ask for advice where some tax adviser will provide free advice (pro-bono).

Another thing, not sure you mention, is to take a loan from your company 401k plan. Be carefully, if they lay you off, you have x amount of time to pay them back on the loan you took out.

So plan this out before you even take a direction on what you want to do. Good luck.

Hopefully it's ok if I ask my question here. I'm considering moving to Berlin maybe next year or so. The only information I couldn't find is how the German pension plan system (http://www-rohan.sdsu.edu/~sandrade/pension-plan.htm) is structured compared to the US and what to do with my 401k. So if anyone could help me with that, it would be appreciated.

do the hardship withdrawal as the last option.

you're posting on here which means you're paying for internet service. Can that and start taking the computer to Starbucks.

Drop all unnecessary expenses, its simple.

Hopefully it's ok if I ask my question here. I'm considering moving to Berlin maybe next year or so. The only information I couldn't find is how the German pension plan system (http://www-rohan.sdsu.edu/~sandrade/pension-plan.htm) is structured compared to the US and what to do with my 401k. So if anyone could help me with that, it would be appreciated.

Any time you leave a job, you want to take your 401k with you. This means doing what's called a "direct rollover" or "401k rollover", which are two terms for the same thing. It's a paperwork exercise to "roll" your 401k money into an IRA. Do not bring the money home, it'll be called an "early withdrawal" and subject to huge taxes and penalties. With the direct rollover, the money floats from your 401k straight into an IRA with no taxes or penalties. Then your IRA is under your control, and not subjected to the limited choices imposed by being in a company administered plan. You and a decent financial planner can gin up an IRA and spread the money across the entire universe of mutual funds. Much more control, many more options, no further need to deal with the HR people in your old company.

I work at ups and I second working there if you need a few extra dollars right now. They will have you working by like next monday if you apply tonight. There crazy like that. With christmas coming they need alot of extra hands. UPSJOBS.com

I'm looking for some opinions. I can cash out my 401K and get about $5200 this would catch me up on all the house payments I am behind on. I know I will have to pay a penalty and income tax on it but I always get a refund on taxes so I don't think that is much of a concern. I can also take a loan out on it for $2000 this would catch me up on most of the payments and avoid penalties and income tax but this also generates another monthly payment which I don't want or need right now. I really think I should take the $5200 and secure the place I live and hope work picks up or I start my new job sooner than expected (very unlikely). Any input is appreciated.

Depends man... consider at the age of retirement how much you lose based on waiting a year for 401k.. return can drop 100k or more.. so losing 5200 may not seem like much now but it hurts in the long run.

If you need it or you are completely screwed then go for it. Just as long as you remember that it is a get out now situation and things may not pick up later and you'll be back in the same boat with no way out this time. Good luck with whatever you choose man