401k for people who are not of age to pull it out without penatly

I have yet to hear Dave Ramsey recommend using the 401k for people who are not of age to pull it out without penatly. The reason is, that if you compute the penalty, the tax, etc, you find yourself essentially paying an excorbitant interest rate.

What many 401k participants, desperate for money, may forget is the cost of taking a financial hardship withdrawal. A $10,000 withdrawal does not equal $10,000 in your pocket.

“If you are under 59 1/2, you will lose 35 percent to 45 percent of the withdrawal in taxes and penalties,” Benna said. “You need to think about that.”

For example: suppose your tax filing status is married filing jointly and you earn $60,000 a year. That means your income falls in the 27 percent tax bracket.

If you take a $10,000 hardship withdrawal to pay for your child’s college tuition, you will owe $2,700 in federal income taxes and an additional $1,000 to cover the early withdrawal penalty. You’ll be left with $6,300, or less if you also owe state income tax.

Taking a hardship withdrawal can also result in longer-term pain — a less generous retirement.

Take the example of a person who, starting at age 30, contributes $5,000 a year to her 401k plan. At age 40, she buys a house and takes a $10,000 hardship withdrawal for the down payment. Let’s assume her portfolio generates an average annual return of 8 percent. By retirement at age 65, she will have $793,094. Had she not taken the hardship withdrawal she would have had $861,584, or $68,490 more.

A $10,000 withdrawal may seem insignificant today, but over time it can mean a lot. The trouble is making up for it in the account.

Tapping into the 401k should always be the last resort.

My 2 cents worth.

I don’t know about 401(k) s to venture a guess

If you live in an excellent public school district, it sounds foolish to pay for private school. I’m from New York City. Several schools such as Bronx High School of Science, Stuyvesant, and Hunter College are harder to be admitted to than a private school. I was raised with a lower-income ghetto education. I worked hard. Several elite private colleges awarded me scholarships. The difference in class between public and private school grads was shocking. It’s not only a matter of basic knowledge.

The self-confidence and sophistication is hard to replace. If I had children, I would scale down my house, etc. before I messed with their birth right – a good education. Friends of mine have barely squeezed by paying for private tuition. Not very relevant. I suppose I am awed that people will sacrifice for their children.

I know what you’re talking about me. We all do what we can for the kids, but I don’t think that any amount of sacrifice can give them the self-confidence and sophistication that kids from wealthier families have. The school and even the freedom from financial worries are only a small part of it.

People raised on royal jelly are different to the core and they approach life from an entirely different point of view. I grew up in a very upscale community and while we were merely part of the struggling middle class, we felt like we were dirt poor because of what our friends were like. Yes, it’s better to be the stable boy for the royal family than a migrant worker, but you still will never think of yourself as much more than a slave even if you do manage to get into Oxford.

Junk mail problem

I work in the customer service department of a publishing company that publishes investment newsletters. Part of my job, besides subscription processing, is opening the daily mail. We frequently get envelopes stuffed with our promotional material, other people’s ads (but no good coupons which is what I can use), monopoly money, political articles, religious tracts, porno ads (which should be illegal!), confetti (which I had to clean up, no fun), all kinds of junk. My supervisor told me that she has personally opened mail that had a frog corpse in it, as well as one with a used feminine hygiene product in it. Now that’s just SICK.

If you want to know the truth, when you do stuff like that, it just makes you look like a moron with too much time on your hands. And it’s WRONG to make a company (even credit card companies) pay for useless mail that you send back. A simple “please take me off your mailing list and do not sell my name” is much more palatable than an envelope full of junk.

Also, if you send a form that has your name and address on it, it probably will be processed. For all we know, it’s a legitimate order (we offer billed subscriptions).

Just use common sense and common courtesy. If you don’t want it, kindly let the company know. Believe it or not, they do have real live people who work there, too.

If that is all it took. How come I keep getting the same crap from the same people even after telling them to take me off their list numerous times? As we sow so shall we reap!

Has it occurred to you and other mass mailers that NO ONE wants your junk? Helluva way to make a living. Where do I sign up for that?

I just wanted to reply to the comment Tom left to Ava.

( “Has it occurred to you and other mass mailers that NO ONE wants your junk? Helluva way to make a living. Where do I sign up for that?”)

This comment was uncalled for. No one has the right to attack her for job. Last I checked this group is here to help people in debt. The message at hand was how to get you name removed from mailing list and she was only trying to help out and let all of us know that stuffing the envelopes with junk and mailing them back does not help any of us. Just simply put remove from maililng list on it. We are not here to bash people for their situations or what they do, we are all here to try to help each other. Please keep this in mind.