Just like Indiana Jones, that holy grail of your savings, that 401k that you have saved up, has some pitfalls and traps attached to it that you need to know about. Hey there, welcome back to my channel! People often want to know when they can tap into the money that they have saved up, that 401k nest egg that they've saved over the years. When can we tap into it? Well, this is the video going over that, so if taking money out of your 401k is something you're interested in right now, stick around and we'll jump into that content. But before we get into that, have you subscribed to this channel? This is the Happiness IRA, where we talk about how money weaves itself into your life. You are stepping into the driver's seat of your finances and you need to know some information. This is the channel for you, so hit that subscribe button. The first thing you need to know is that every 401k plan is unique, so I'm going to be talking in general principles today, but you'll want to reference what's called a Summary Plan Description (SPD for short). And that document should be found on your online access to your 401k. That document is going to tell whether or not you're actually able to do the things that I'm mentioning. The second thing we should talk about here is that I am referencing a pre-tax 401k, so we're not talking about Roth 401k's here, especially when it comes to the tax implications. Alright, now that we've got all of our assumptions out of the way, let's dive on in. Typically, for someone to be able to take money from a 401k, they have to have hit several qualifying events. So, what are...
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Lump sum distribution from 401k Form: What You Should Know
Use this form to request a complete, partial or systematic distribution from your Putnam Standardized 401(k), Profit Sharing or Money Purchase Pension Plan Lump sum withdrawals from individual or family plans If you have more than one account with the same provider, you may be eligible for an additional lump-sum distribution within the first three years of coverage, provided that the amount does not exceed A 401(k) plan is considered a “qualified plan” if, subject to a limited exception, it provides: at least 50% of the cost of the employer's matched contributions (which are subject to a 6% excise tax; there is no excise tax on the employer matching contribution) and the employee does not pay income taxes on the matched savings (for some plan years in 2024 and 2018) A Putnam 401(k) or Money Purchase Pension Plan is considered a “qualified plan” if the plan provides at least 50% of the cost of the employer's contributions (tax-free contributions to the company) plus a matching portion (which is tax-exempt and subject to a 3.8% tax, if the Plan's effective date is after 2014; the matching portion must reduce the Plan's cost by at least 3.8% for a plan year in 2024 and 2018) with the employee paying income taxes on the matched savings (for some plan years in 2024 and 2018) You are eligible to use the special Lump-Sum Distribution provision of IRC Section 402(c) if the income in that account exceeds 55,000 (or 93,000 if you are a nonresident alien) for an individual (including a trust), or Income exceeding 55,000 is excluded from gross income. (For the income threshold for a nonresident alien, see Rev. Pro. 2016-37(a)) An individual is considered to have a “high net worth” account if the account has a net worth in excess of For an individual's non-corporate plan, the “high net worth” rule means that if an account has a total value of 1 million or more at the close of the year (the same amount, no matter when the asset was acquired), the account must be in one of the following “eligible retirement accounts” (for more information, see Rev. Pro.
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