Give away a 401(k)?
Question: Ron receives a VA pension and is being penalized on his pension benefits because he has a 401(k) that earns a small amount of interest. Ron wants to know if he can give it away.
Dave Ramsey's advice: Not without cashing it in and losing half of it to penalties and interest unless you're over the age of 59 1/2. If you're over 59 1/2, you won't have to pay the 10% penalty. You will only pay your tax rate. Your tax rate is probably fairly low, so you could cash it in and give the money away. If it's over $12,000, then you may have to look into gift tax. In that case, you'd want to get tax advice from a CPA.
