August 16, 2009
What are the penalties for withdrawing your retirement funds early to buy your first home?
one4Christ asked:
Does anyone know what (if any) are the penalties for withdrawing some or all of your retirement funds to use as a down payment to purchase your first home? I have a 457 retirement plan and I am considering pulling out $10K to go towards the purchase of my first home. Normally I would be penalized 30% but I heard somewhere that there are 3 circumstances where this is allowable without penalties. Can anyone vertify this is accurate or tell me where I can get more info.
Does anyone know what (if any) are the penalties for withdrawing some or all of your retirement funds to use as a down payment to purchase your first home? I have a 457 retirement plan and I am considering pulling out $10K to go towards the purchase of my first home. Normally I would be penalized 30% but I heard somewhere that there are 3 circumstances where this is allowable without penalties. Can anyone vertify this is accurate or tell me where I can get more info.
Thank you!
Arnav
Comments on What are the penalties for withdrawing your retirement funds early to buy your first home?
Amani
Generally speaking, the first 10k can be withdrawn without penalty, BUT you still have to pay the taxes on that, for a first-time home buyer ( not if you’re buying for the 2nd or 3rd time ). I needed 10k IN FULL when I did it, so I had to withdraw 14,000 to cover the taxes, and since I went 4k over I had to pay penalties on that 4k as well as taxes. I think medical emergency qualifies as well, but I’m not sure on any other usages.
- The Gremlin Guy - happily living at my Home for 7 years now..
Deja
Contact the institution which administers the retirement plan. Frequently you can find this type of information on-line at their website. I like the personal touch better however. Call and speak to a live person tomorrow if possible. You should be able to find their telephone number at their site also.
Heaven
The penalty exemption on the $10,000 only applies to IRAs, not employer sponsored plans.
Also, generally you have to leave the job to have access to the money.
One option may be a loan from the plan. Check with the administrator of the plan to see if it allows for loans.