Against the grain..purchase opinions

What you are proposing would be very unwise. You can only cash in on the 401(k) if you meet certain requirements and if you do withdraw from it early not only will you get hit with federal fees and taxes up front but you will also pay taxes on it again at the years end.

Being a good driver is its own reward, owning a truck is only rewarding to those who have superior business skills. If you have a good head for business and won't mind a stress filled risk, go for it.

In my opinion, be a trainer, get the bonuses, live cheap, in other words do whatever you can to make it on what you have now. You don't have that much longer to go and it would be better for you to tough it out and have something left for retirement than die broke running your ### off.

 

when you withdraw the money, you can choose to either have them withhold the taxes at 33% tax rate, or you can elect to NOT have them withhold it.

It's your choice when you make the withdrawl.

At the end of the year, you will have a 1099 that you will receive to file with your taxes. It will also show how much was withheld if you elect to have it withheld.

This is where it becomes a double edged sword.

You WILL be taxed on this money.

If you operated as an LLC filing sole-proprietorship (basically as individual), and you report an operating loss in your business this year, then your tax liability will be seriously reduced.

You would have to sit down with a CPA/tax preparer to get a better jist of how this can play out though than what anyone CAN explain on the internet.

Yes, it is that confusing.

Whatever you do though, you WILL pay a 10% early withdrawl penalty.

Before you do anything though, ...

Sit down with someone from S.C.O.R.E. and discuss your plans and ideas for independent owner/operator with someone.
http://www.score.org/

Without a solid business plan and financial backing of your business, you are setting yourself up for failure.

If your finances are that bad you can't even get financing, you need to sit back and evaluate WHAT got you into that position and figure out how to correct that situation.

Otherwise you are simply setting yourself up for failure....again.

With an even harder fall.

 

The quickest way to wind up with a small fortune in the trucking industry is to start out with a large one. At your age, I sure as hell wouldn't be giving up my retirement savings to buy a truck. BEST case scenario, you pay a ton of extra taxes and buy a truck, which allows you to work until you are no longer able to pass the DOT physical, at which point you survive on whatever meager existence is possible relying upon an insolvent social security system. Worst case scenario, you pay a ton of extra taxes and buy a truck, and things don't work out. You lose everything and have to start over from scratch as a company driver (minus your retirement savings) and work until you no longer are able to pass the DOT physical, at which point you survive on whatever meager existence is possible relying upon an insolvent social security system.

Personally, I wouldn't touch your retirement savings. Not unless you plan to drive a truck for as long as you can before the government/doctors sideline you.

 

instead of concentrating on the tax issues of the 401K, perhaps it might be better to do some more analyzing of why you have a bad credit rating now. Will your current spending habits and sense of financial responsibility somehow instantly change over night because you will be an owner operator? I really don't think so, and neither do the folks that would be willing to lend you money. Perhaps some financial counseling might be the best short term path to take, while you still have a job. Yes it may involve some major changes and temporary hardships, but so would becoming a successful owner operator. But if you were an unsuccessful owner operator after spending your 401K, then you would really have nothing.

 

A lot of good advice here. I have a couple questions though. if you have 18 years experience, then you should know there are many companies out there that would pay you more than 32k per year. I would think you should be about double that rate. Being an o/o isn't all its cracked up to be for a lot of people. It has a very high failure rate. Take some online business courses before you go any further, there are some on sba.gov.

As far as hitting the 401k, I would not withdraw the money, but I would borrow against it. That way it WILL be repayed.

There is obviously a lot of backstory your leaving out. That omission could be the difference in go for it, or stay where your at. The first question is what is keeping you where you are now? The second question is do you have any work lined up, or do you think it will magically appear when you buy your truck?

 

Ok here is what I did. About a month ago I took 11 thousand out of my retirement added it to the 10 thousand I had in cash and went and bought a truck. I have the title in my hand. I did this thinking I had a for sure deal with a carrier to lease me on. After buying the truck, having a bunch of work done to it, installing a blower( pneumatic/drybulk), installed I now am scrambling to find a carrier because the one I had lined up lost their contract and can't lease me on.

I'm not freaking outbecause I still have my job, I don't have any payments , and I have a decent truck that if all else fails I can sell and recoup.

All together I have $26 invested in a truck, blower and repairs to get the truck up to 100%... only bad thing is I bought the truck used and it wasn't DOT inspected prior to the sell which I didn't think was all that bad because I thought I had a sure deal.

All this to say unless you are prepared to take a loss , you are probably better off not losing in the first place. I have awesome credit but I'm not a trucker so no one would touch me for financing. Which if I would have been financed earlier I would have been leased on to a carrier that would have eventually lost their contract through no fault of my own I would have been stuck with a note and scrambling for another carrier to lease on with. I'm optimistic things will turn for the better as the first of the month rolls around.

 

BUy the truck ....put me inthe drivers seat and you sit back and act like youre retired, til I call you at 230am telling you that my rear trailer suspension has failed and flattened all four of the very rear tires all at once. and oh yeah Im 125 miles from anywhere inthe kiddle of the Utah desert and my phone has no service and this guy just happened to stop and check on me so any business we have to do on the phone we gotta do it right now. Yes that happened to me.....anyway, Bes Wishes to you in your endeavours and remember...you cant take it with you so you might as well enjoy it while youre here and leave the wifey a truck to drive so she can support herself after you pass on to the big truck stop in the sky.