Date Added: Aug 2010
After working for a manufacturing company for the past 20 years, a client approaches you who has recently been let go and is looking forward to starting the next phase of life by purchasing a local restaurant franchise. Your client has a substantial 401(k) account with the manufacturing company that could be used as seed capital to purchase the franchise and obtain bank financing. But your client is younger than 59? and is not excited about the prospect of paying income tax on the distribution, plus a 10 percent excise tax to the Internal Revenue Service (IRS) for the early distribution of his 401(k) funds.