getting money from 401k without penalty...

[Guest playa-j]

:confused: I need some help from somebody. I have been working full time and attending Jr. College part time for the last 5 years. I have transfered to a UC, and decided to quit my job, and get my BA. My question regards my 401k. I am going to need all the money I can get for school. Can anyone tell me if there is a way I can either roll my money over and borrow against it, or take it out without being penalized?? Please help me...

Thanx

Jason

[Guest franky]

Because you are now separated from service, you may roll over the 401(k) to a traditional IRA. Then you can take a distribution from the traditional IRA under the exception to the 10% penalty for higher education expenses. This can all be done at the same time. In other words, there is no waiting period after the 401(k) funds hit the traditional IRA. Good luck finishing your studies.

[Guest IRA SPECIALIST]

Take my advice-

leave the money in the 401(k)- take a student loan.

Money is 401(k) will accumulate greatly for retirement and is protected from any and all lawsuits( except divorce and IRA levy) State of CA Vs OJ Simpson

[John G]

Good idea to go full time and finish.

I also would like to suggest that you consider any of the various loans, work/study, dorm RA, teaching assistant, etc. It sounds like you would also be highly likely to qualify for a scholarship if you have been paying your own way... go see the financial aid office on that point and check the web references on scholarships.

I would tap retirement resources if that was the only way to pay to the accelerated completion. A tax shelter started early is worth a lot because time is very much the investor's friend.

You did not provide any numbers on college cost, time to complete, prior year's income.... but I think you will find alternative ways to finance the education finish if you keep looking.