Son has been out of college for several years but the loans are still around $26,000. Do I get penalized 10% if I withdraw my money from the 401 K for this?
Answers (1)
I never understood this, parents feeling entitled to pay for their kids college? What....your kid can't get a job and pay for his loans on his own? Your account cannot be accessed for regular withdraws until you are 59 1/2 unless it's a hardship. You will have to pay income taxes as well as 10% federal penalty for early withdrawal. So not in your best financial interest.
We love to help our children but sometime it time to cut the cord. you worked hard for that 401k. You need to benefit from it.
You will be charge the 10% penetaly , the only way around it is if you are disable but you will still have to pay income tax on the withdrawal.