If you were to take money out of your 403(b) to use for purchasing a house do you get the same penalty as if you were to just take the money out for anything?
2006-09-06 08:18:08 · 2 answers · asked by myproblem 1 in Business & Finance ➔ Other - Business & Finance
It varies by investment company. It would be a loan rather than an early withdrawl, right?
http://www.403bwise.com/faqs/index.html
2006-09-06 08:24:00 · answer #1 · answered by IT Pro 6 · 0⤊ 0⤋
There is a penalty, but it is not the same as the standard early withdraw penalty. The early withdraw penalty can be as much as 30% of the withdraw, whereas the early withdraw for allowed reason could be 10% instead.
As always, keep in mind that you cannot put that money back in once you take it out, so you lose the retirement potential of the funds you take out, which generally will increase in value faster than the house you purchase. Your better off taking a loan from your 403(b) if you are allowed to do so, so that you can replace the money in the account.
2006-09-06 15:58:01 · answer #2 · answered by ? 2 · 0⤊ 0⤋