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Early withdrawal penalty for Roth 401k
04-20-2009, 01:05 AM
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#1
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Recycles dryer sheets
Join Date: Jul 2007
Posts: 346
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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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04-20-2009, 06:22 AM
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#2
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2002
Location: Texas: No Country for Old Men
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Numbers is hard
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04-20-2009, 11:32 AM
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#3
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Recycles dryer sheets
Join Date: Jul 2007
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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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04-20-2009, 11:44 AM
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#4
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Moderator Emeritus
Join Date: Feb 2004
Location: minnesota
Posts: 13,228
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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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No more lawyer stuff, no more political stuff, so no more CYA
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04-20-2009, 01:24 PM
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#5
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
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Location: North Oregon Coast
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 Quote:
Originally Posted by Martha
Be sure to note that the penalty and tax is on the earnings only.
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What are these things called "earnings" in a Roth IRA of which you speak?
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04-21-2009, 01:18 PM
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#6
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Thinks s/he gets paid by the post
Join Date: Jul 2003
Location: Pasadena CA
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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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T.S. Eliot:
Old men ought to be explorers
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04-21-2009, 01:44 PM
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#7
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2002
Location: Texas: No Country for Old Men
Posts: 50,021
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Quote:
Originally Posted by yakers
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?
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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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Numbers is hard
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04-21-2009, 04:44 PM
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#8
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Recycles dryer sheets
Join Date: Jul 2007
Posts: 346
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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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