Comments on: Can I start a 401k at target to help pay for college? http://www.secretfinance.com/blog/can-i-start-a-401k-at-target-to-help-pay-for-college/ Thu, 17 May 2012 17:05:00 +0000 http://wordpress.org/?v=2.7 hourly 1 By: Billy P http://www.secretfinance.com/blog/can-i-start-a-401k-at-target-to-help-pay-for-college/comment-page-1/#comment-2579 Billy P Fri, 19 Feb 2010 11:19:22 +0000 http://www.secretfinance.com/blog/can-i-start-a-401k-at-target-to-help-pay-for-college/#comment-2579 No you cant recieve money until your 65.<a href="http://www.englishoverseas.com/teach-english/teach-english-thailand.htm"> Billy P</a> No you cant recieve money until your 65. Billy P

]]> By: v b http://www.secretfinance.com/blog/can-i-start-a-401k-at-target-to-help-pay-for-college/comment-page-1/#comment-2578 v b Thu, 18 Feb 2010 21:52:27 +0000 http://www.secretfinance.com/blog/can-i-start-a-401k-at-target-to-help-pay-for-college/#comment-2578 Actually this is a LOUSY idea for you. Your income is probably less than $5700, so you won't taxes now anyway. The major purpose of the 401K is to reduce your income by tax-deferring the money in the 401K. After you quit working at Target, you'd have to roll the money to an IRA before taking a distribution for school expenses (otherwise you owe a 10% penalty). Even if you use the money for school, you still OWE the income tax. Worse as a dependent, you would pay the income tax as your PARENT'S tax rate. That means money you saved at 0-10% when you put the money into the 401K will cost you 15-25% to take it out. ("Kiddie tax now goes until age 23.) Bad idea.<a href="http://www.chefcookingware.com/989"> v b</a> Actually this is a LOUSY idea for you.

Your income is probably less than $5700, so you won’t taxes now anyway. The major purpose of the 401K is to reduce your income by tax-deferring the money in the 401K.

After you quit working at Target, you’d have to roll the money to an IRA before taking a distribution for school expenses (otherwise you owe a 10% penalty).

Even if you use the money for school, you still OWE the income tax. Worse as a dependent, you would pay the income tax as your PARENT’S tax rate. That means money you saved at 0-10% when you put the money into the 401K will cost you 15-25% to take it out. (”Kiddie tax now goes until age 23.)

Bad idea. v b

]]> By: Steve D http://www.secretfinance.com/blog/can-i-start-a-401k-at-target-to-help-pay-for-college/comment-page-1/#comment-2577 Steve D Mon, 15 Feb 2010 18:48:33 +0000 http://www.secretfinance.com/blog/can-i-start-a-401k-at-target-to-help-pay-for-college/#comment-2577 No - a 401(k) is for retirement..if you withdraw prior to age 59 1/2, you pay penalties. What you want is to open a 529 plan. However, if you pay no taxes, it will be of very little use, since the main advantage of these plans is the tax deductions. You would be just as well off making investments outside of a 529 plan.<a href="http://www.qualitylawnmower.com/lawn-mower-service.htm"> Steve D</a> No - a 401(k) is for retirement..if you withdraw prior to age 59 1/2, you pay penalties. What you want is to open a 529 plan. However, if you pay no taxes, it will be of very little use, since the main advantage of these plans is the tax deductions. You would be just as well off making investments outside of a 529 plan. Steve D

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