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So what? It’s pre-tax dollars so yes you pay income tax. You will have to do that when you withdraw in retirement too. If it’s for a emergency..like you lost y
by randomacct3847 8y ago
So what? It’s pre-tax dollars so yes you pay income tax. You will have to do that when you withdraw in retirement too.
If it’s for a emergency..like you lost your job then presumably you’d be in a lower income bracket for that year.
- Aloha 8y agoThe penalty is unreasonable - that's my primary objection.
- randomacct3847 8y ago10% is unreasonable? Are you saying there should be no penalty? I’m arguing it’s low. Every Californian (or anyone living in a state with high income tax) pays a 10% penalty just to live in that state. Put another way, withdrawing from a 401k in a state with no income tax would probably amount to the same amount of tax any Californian pays on their normal income.