Hello! My mom would like to help me buy my first house, but I do not want her to loose any $$ in the process. She is retired, age 67 and her money is still in a 401k from her old employer. She has no other income besides Social Security (under $1k/month). Depending on the answers, she may withdraw up to $60k.
The first question - should she rollover from the 401k to an IRA?
2nd question - if she withdraws money will she have to pay the 10% penalty?
3rd question - what are the chances of her having to pay no or little taxes on what she withdraws? (If she withdraws $60k, is it like her earning $60k in income that year? and that is how the tax is calculated?)
I have promised to pay her back any money she ends up paying in penalties or taxes, but she is worried that amount will be to much. Thanks all for your time and help. Me and mom appreciate it!!
2007-03-28 06:57:45 · 4 answers · asked by Qs for life 1 in Business & Finance ➔ Personal Finance
1) Maybe.
2) No. She is over 59 1/2
3) Zero. Withdrawing $60k in one year would be the same as having a job that paid the same about. Also, 85% of her social security would then become taxable.
2007-03-28 07:04:04 · answer #1 · answered by Wayne Z 7 · 2⤊ 0⤋
There are a few options here. She can withdraw the 401k, she is over 59. You might be able to roll it over but its all hers now...no penalties apply. Taxes do however. Go to your local bank and ask to talk to the investment rep, its free and no obligations are needed. It can't hurt to talk to them and get some great advice.
Good luck!!
2007-04-01 05:11:27 · answer #2 · answered by Pepper 6 · 0⤊ 0⤋
this sound very important and I am not good with this type of thing so I refuse to tell you something wrong so I'm not going to answer this question but I will tell you this you need to to talk to an account or money marketer that can lead you to the correct answer.
2007-03-28 07:05:22 · answer #3 · answered by heavenlli_61 5 · 0⤊ 2⤋
Tax liability on $150,000.
2015-04-25 05:41:10 · answer #4 · answered by tony 1 · 1⤊ 0⤋