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!
2007-07-01 08:22:28 · 3 answers · asked by one4Christ 1 in Business & Finance ➔ Personal Finance
Generally speaking, the first 10k can be withdrawn without penalty, BUT you still have to pay the taxes on that, for a first-time home buyer ( not if you're buying for the 2nd or 3rd time ).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..
2007-07-01 08:33:42 · answer #1 · answered by Anonymous · 0⤊ 0⤋
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.
2007-07-01 15:37:20 · answer #2 · answered by MathBioMajor 7 · 0⤊ 0⤋
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.
2007-07-01 16:51:23 · answer #3 · answered by Wayne Z 7 · 0⤊ 0⤋