Paying for school: using your IRAs

^^^ Correct.

Don't be misled into thinking that you can take out your entire IRA/401K amount. You can only take out an amount up to your Qualified Educational Expenses. See: http://www.irs.gov/publications/p970/ch09.html

Personally, I wouldn't touch retirement money. The tens or hundreds of thousands you lose by not collecting all that interest over a lifetime will make the money you do take out pale in comparison.

I agree with the above poster... if at all possible, do not touch your retirement money. You can finance an education, but you cannot finance retirement.

I've learned I can roll my 401K retirement savings (my savings, not my husbands) into an IRA and then cash that out to pay for school. This is an excellent option for me and I'm looking into it.

When you use the IRA $$ for education, you don't pay the early withdrawal fee of 10% imposed by the IRS. However.....I guess you still get hit with federal taxes. Does anyone know how much these taxes are? A certain percentage? I've looked on the internet...can't find any facts...anyone know firsthand?

Thanks!

Hi Suki-P,

Based on the things you have revealed in your post above:

a) you don't know what federal taxes are based on

b) you think cashing out a 401K is a GOOD thing

I would advise you to seek out a good, objective financial advisor before you make another move...

Don't do it....leave it there and forget it...