How to protect money from 401k after cashing it?
First of all, 20% will be withheld right off the top. When you file your taxes for 2011 there will be an additional 10% penalty if you are under 59-1/2.
Does your 401k allow you to take a loan? Mine did and that's how I paid my credit card settlements along with saving up some money.
If you find you must wipe out your 401k, then have them send you a check; don't have it wired to your account.
Thanks for responding.
I know about the penalty fees, but right now its a necessity. I am in my early 20s so I plan to start a retirement savings again once I have paid for school and my taxes.
one more question:
Will creditors know I took my 401k money?
No, they won't. Ten years ago I was in the same boat and cashed out $11,000 in rollover money. Do what ya gotta do to survive.