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Early withdrawal penalty for Roth 401k
Old 04-20-2009, 02:05 AM   #1
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Early withdrawal penalty for Roth 401k

Just wondering if anyone knew what the early withdrawal penalty is for a Roth 401k?

I couldn't find it anywhere. I even asked T. Rowe Price and they couldn't give me a straight answer......maybe it's because they don't want me withdrawing anything!

Jim
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Old 04-20-2009, 07:22 AM   #2
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10%.

Roth IRA early withdrawals and penalties
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Old 04-20-2009, 12:32 PM   #3
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Thanks REWahoo

So the early withdrawal penalty for a Roth 401k is the same as the penalty for a Roth IRA?

Jim
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Old 04-20-2009, 12:44 PM   #4
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Be sure to note that the penalty and tax is on the earnings only. Withdrawals are first treated as returns on what you put in and there won't be a penalty on that money.
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Old 04-20-2009, 02:24 PM   #5
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Be sure to note that the penalty and tax is on the earnings only.
What are these things called "earnings" in a Roth IRA of which you speak?
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Old 04-21-2009, 02:18 PM   #6
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So if there is a loss in a Roth account then there would be no penalty? It could be that in previous there was some gain in previous years. So if I put in $4k and it had gains to $6k but then went down to $3K I could take out the $3K tax free?
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Old 04-21-2009, 02:44 PM   #7
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So if there is a loss in a Roth account then there would be no penalty? ...So if I put in $4k and it had gains to $6k but then went down to $3K I could take out the $3K tax free?
Yes - although the fact you paid tax on $4k before placing it in the Roth might prompt some to argue your $3k withdrawal was far from "tax free".
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Old 04-21-2009, 05:44 PM   #8
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Thanks Martha, Ziggy, Yakers, And ReWahoo

Ziggy is right....unless I invested in a money market...which I did not....you have a big loss!

Jim
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