Date: 10 Mar 2010 Comments: 0

Normally taking money out of a 401k plan early can really hurt your financial future, but if you have no other option there are ways to do it.

The first thing you will need to do is to figure out how much money you actually have in your 401k. This way you know how much you can actually take out.

It isn’t hard to check 401k balance in fact some companies will regularly send you a statement of your plan that tells you how much you have in it, your deposits and your profits and losses. If your does then checking your account can be as easy as going to your last statement and taking a look at it. If you don’t then you will have to go searching for it yourself.

Unless you work for a big financial institution your company would have used a third party company to create your 401k retirement plan. The first step to checking your balance is to figure out what company host your 401k. If you are not sure your company’s human resources department should have some information about this and will be able to point you in the right direction.

Once you know what company host your plan you can call them and request information on your 401k. If they have a website you may also be able to login to your account and check your balance that way.

Now that you know how much you have in your account you are able to determine how much you need and how much extra money you can get.

You have a few 401k distribution options, but remember that any money you take out early will be charged with a 10% early withdrawal fee along with taxes. Also if you decide to take out your entire 401k plan 20% of the plan will be withheld to pay taxes, but it will still be treated as income.

The rest of the money will be given to you to do with as you please, but remember one of the best tips on 401ks financial advisors say is to avoid taking money out of your account early. Be sure that befor you do you are sure that there are no other options.