Early withdrawal penalty for Roth 401k

[summer2007]

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

 

[REWahoo]

10%.

Roth IRA early withdrawals and penalties

 

[summer2007]

Thanks REWahoo

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

Jim

 

[Martha]

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.

 

[ziggy29]

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?

 

[yakers]

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?

 

[REWahoo]

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".

 

[summer2007]

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