Could I have really avoided the 10% penalty by rolling a 401k withdrawal to an IRA..?

Ralph · #1 (**permalink**) 03-08-2008, 01:26 PM

and THEN using it to pay last year's tuition? It's too late now, and I didn't realize that the tuition exemption applied only to IRAs, not to 401ks. But could I have done that? It seems too easy.

All you people with kids headed for college, take heed - save BEFORE college, no matter how impossible that may seem. Withdrawing from my 401k not only cost me this penalty, it increased my last year's income which will reduce this year's aid. I am really taking it on the chin.

disneysteve · #2 (**permalink**) 03-08-2008, 01:37 PM

Yes, you could have avoided the penalty. You still would have owed taxes on that money and it still would have raised your income, so that part wouldn't have changed.

Ralph · #3 (**permalink**) 03-09-2008, 04:40 PM

I wonder if there is anything I can do now? Although there's probably a time limit for rollovers.

disneysteve · #4 (**permalink**) 03-09-2008, 04:46 PM

Quote:

Originally Posted by Ralph

I wonder if there is anything I can do now? Although there's probably a time limit for rollovers.

I think the rollover limit is 60 days.

creditcardfree · #5 (**permalink**) 03-11-2008, 09:47 AM

Yes, it is 60 days.