401k....leave it be or have some fun with it now?

So much depends on what if's?  I'm stage IV from the start and did access one of my accelerated death benefits.  It surely helped me eliminate financial stress.  I did hear that you may access 401K's without penalties if you have cancer; not sure if it depends on what stage you are. 

I would go for it as long as you don't take it all.

Terri

It costs you at least about 30%. All the taxes + a 10% penalty. Makes it more expensive than a high interest credit card.



Here is info on hardship withdrawal:



The following items are considered by the IRS as acceptable reasons for a hardship withdrawal:



Unreimbursed medical expenses for you, your spouse, or dependents.

Purchase of an employee's principal residence.

Payment of college tuition and related educational costs such as room and board for the next 12 months for you, your spouse, dependents, or children who are no longer dependents.

Payments necessary to prevent eviction of you from your home, or foreclosure on the mortgage of your principal residence.

For funeral expenses.

Certain expenses for the repair of damage to the employee's principal residence.*

Hardship withdrawals are subject to income tax and, if you are not at least 59½ years of age, the 10% withdrawal penalty. You do not have to pay the withdrawal amount back.



A hardship distribution may not exceed the amount of the need. However, the amount required to satisfy the financial need may include amounts necessary to pay any taxes or penalties that may result from the distribution.

Leave your 401k plan in place.

Really, you should expect to be CURED.  And you don't want to look back at having squandered your retirement savings during a rough patch in your life.

I had to make the same decision when I was diagnosed, and with a 9 in 10 chance of being cured, my thoughts were "how do I finance my life until 90 or so".  I worked during chemo, as self-employed.

You also want to look at what your 401k will be worth in 25 years time.  Suspect at least 2.5x what it is worth now.

Leave it where it is.  Good luck.

(I do recommend some CHEAP getaways, however.  Plus little things that fit in your budget.)

trvlr.

This is a dormant thread. No one has posted for two years, though I agree with your opinion

Anyone naming minors as beneficiaries should consult with an estate planning attorney since a custodian is required to administer the funds

The nice thing about a 401(k) is that it is right there, accumulating funds from both you and your employer, with your contribution subtracted from your taxable income, with dividends, capital gains, and both your and your employer's contributions tax-deferred until you withdraw funds. A few caveats arise when it becomes time to withdraw funds. Here are a couple of thoughts I've been known to mention to my clients:

If you are married and name someone other than your spouse as primary beneficiary, he or she will need to sign agreement to being, so to speak, disinherited. If minor children as beneficiaries, there should be a place on the form to name a custodian. A custodian has far stricter oversight requirements than a guardian, but the moneys will be preserved until the children reach the age of majority in your state. On that exact date, the money becomes their own to do with as they wish.

If you borrow against your 401(k), then leave your employment, the loan becomes payable within a few months. Failing repayment, the amount is treated as income. Sometimes it can be helpful to delay retirement for a couple of weeks or months to place this taxable event in a new calendar year.

If you withdraw funds before age 59 1/2, Uncle Sam grabs 10%. If you are not fully vested, your employer gets to retain some or all of its contributions.