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Is it worth losing 40% to get cash?
I'm in the middle of a divorce. I'll be receiving between $250,000 and $300,000 from his 401 K, IRA and money market accounts. I don't have a retirement account and don't want to have to open one in order to receive the funds. I want cash to start investing in RE. I will need it for income after the alimony runs out, so a self directed IRA won't work from what I understand. I spoke with a CPA and was told that I would lose 40% in tax and penalties. Is there any other way, so I don't lose $100,000+?
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#1 New Member Introductions Contributor
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- Anaheim Hills, CA
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#1 New Member Introductions Contributor
- Solo 401k Expert
- Anaheim Hills, CA
It is not very wise in my opinion to lose 40% to taxes. I would not pull the money out since you don't need them. If it comes to the point that you will have to pull some of the cash, you can do so then and only pay taxes and penalties on the amount that you pull out and not on the entire balance.