- Mark as New
- Bookmark
- Subscribe
- Subscribe to RSS Feed
- Permalink
- Report Inappropriate Content
Education
If you decide to use your employer-sponsored 401(k) for educational purposes, be aware of the rules and regulations that govern these early withdrawals, which are not penalty-free:
- Typically, there is a 10% early withdrawal penalty for distributions made before 59½.
- Since the money was invested tax-deferred, you’ll need to pay income tax on the withdrawn amount, and state taxes may also apply depending on your location. Typically a withdrawal counts towards your taxable income for the year, which could push you into a higher tax bracket.
January 31, 2024
8:02 PM